Oil hits one-month low on United States crude shares construct,…
Feb 10 2018 by Cristina Jennings
Brent crude price was at $65.28 per barrel down 23 cents, or 0.4 percent, from the previous close.
On Wednesday, the U.S. West Texas Intermediate traded 2.5% down to $61.79 per barrel to a one month low and has gone down by more than 5.6% this week alone. Support on Thursday came from the second outage in as many months on the 450,000 bpd Forties pipeline network, Britain´s biggest, which supplies much of the crude underpinning Brent futures, although operator Ineos said it would likely restart the pipeline by Thursday.
Also supporting oil prices has been the continued weakness in the dollar, which has helped demand.
Oil prices fell to a one-month low on Wednesday after USA data showed a build in inventories and record high crude production, raising worries of more selling that could expose speculators with big bets on upward momentum in crude prices.
Futures fell as much as one per cent in NY after Department of Energy data showed USA crude production jumped to a record 10.25 million barrels a day last week.
This is the first time since 1970 that United States oil production was above 10 million barrels a day.
But such export transactions are becoming more of the norm than the exception under the Trump administration, which has vowed to make America great as a top exporter of oil in the world, once again.
Analysts also point out that the broad-based fall in the stock markets might exacerbate the dip in crude oil prices if investors who hold oil contracts find themselves selling them to raise cash.
Here is a look at how share prices for two blue-chip stocks and two exchange traded funds reacted to this latest report.
The deal, which commits OPEC and 10 non-OPEC producers led by Russian Federation to cut 1.8 million b/d in supplies through the end of 2018, is aimed at reducing the global inventory overhang. China was the top oil importing country in the world a year ago as it brings more refining capacity online and fills strategic inventories, while domestic oil production continues to decline.
The number of oil drilling rigs in the USA climbed for a second week in a row.
RBC Capital Markets says global supply and demand will be impacted in April by Venezuela.
David Madden, market analyst at CMC Markets, said traders were concerned about over-supply in the market.
Another contributing factor to stronger oil prices is a weaker USA dollar. Exports have increased from a little more than 100,000 barrels a day in 2013 to 1.53 million in November. American Petroleum Institute data Tuesday showed an unexpected decrease in U.S. stockpiles, while on Wednesday U.S. equity futures fell and the dollar rose.