March 24, 2018

Oil prices fall further amid oversupply fears

14 May 2017, 09:37 | Virginia Santiago

In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.

With the specter of surging USA shale output evidently negating Organization of the Petroleum Exporting Countries (OPEC) efforts to reduce the global oil glut, sending crude prices last week under $50/bbl in the process, Saudi energy minister Khalid al-Falih Monday said he was confident the current oil output deal will be extended.

European benchmark North Sea Brent crude fell 1.8 percent to $47.49 a barrel in early morning trade on the Singapore trading platform on Friday, while U.S. crude dropped 2.1 percent to $44.58 a barrel.

CRUDE CONCERNS: U.S. benchmark crude futures fell under the key $45 level after tumbling almost 5 percent during U.S. trading. Other non-OPEC producers, including Russian Federation, joined the deal late past year, bringing expected cuts to about 1.8 million barrels a day.

Producers outside of OPEC picked up the pace, however, leading to oversupply issues like those that drove prices down on Thursday.

"Oil prices tumbled amid concerns over rising USA production despite the high probability that OPEC members will agree to extend production cuts when they meet on May 25th, although any likelihood of an increase in the level of cuts remains slim with OPEC officials playing down this possibility", said James Woods, global investment analyst at Rivkin Securities.

White House Says Hillary Clinton 'Would Have Fired Comey Immediately'
Spicer and his staff huddled behind a hedge Tuesday night in order to avoid a swarm of reporters, The Washington Post reported. Trump said in a series of tweets Friday morning it is "not possible" for his staff to "stand at podium with ideal accuracy".

Some of the struggles of oil and the energy sector this year can be pinned on investors' concerns regarding the ability of major oil-producing nations, including the Organization of Petroleum Exporting Countries (OPEC), to effectively reduce production. The contract lost US$2.30, or 4.8 percent, to close at US$45.52 on Thursday.

"The market will get increasingly nervous as we approach late May, about the details (or not) of an extension to the OPEC production cut agreement". After weeks of oil failing to see substantial draws in US inventories, demand fears and technical pressures began to build.

The United States crude oil production is estimated to reach a 48 year high by 2018, USA oil rigs rose to a two-year high, U.S. inventories reaching near-record high, upcoming IPO of Saudi Aramco, increase in Libya's crude oil production, reports of Iran and Iraq increasing crude oil production to increase market share.

Goldman is referencing the current and future relationship between near-term and the long-term price of oil. The U.S. benchmark's 14-day relative strength index fell below 30 for a second day, signaling the commodity is oversold.

"The market will get increasingly nervous as we approach late May, about the details (or not) of an extension to the OPEC production cut agreement", reports Reuters. Prices fell to as low as $46.64, the lowest since November 30.

Other News

Trending Now

Pentagon chief, Turkish PM meet after decision to arm Kurds
The US Special Presidential Envoy for the Coalition has said that the Syrian Arab Coalition (SAC) led the retaking of Tabqa. USA officials have indicated that 120 mm mortars, machine guns, ammunition and light armored vehicles were possibilities.

Arctic summit: Trump to make 'right decision for the US' on climate
The Arctic Council, he said, will continue to be an important platform as the Trump administration deliberates. Since its founding two decades ago, the Arctic Council has focused on environmental and sustainability issues.

N. Korea accuses Central Intelligence Agency of bio-chemical plot against leaders
North Korean officials claim that the terrorists were later uncovered as being Central Intelligence Agency agents. Any new US sanctions against North Korea would likely affect China, the North's most important trade partner.

Japan says N. Korea missile fell into sea
The type of missile is being assessed and the flight was not consistent with an intercontinental ballistic missile, PACOM said. Military personnel from the United States, Japan, France and the United Kingdom are gathering in the remote U.S.

China's leader offers billions for new Silk Road initiative
Other leaders at the gathering included Prime Minister Nawaz Sharif of Pakistan and President Michelle Bachelet of Chile. Xi promised to avoid forming a "small group" of allies, which he said might harm regional stability.

This one photo captures the intensity of the Celtics-Wizards series
Boston will have home advantage in Monday's decider, with the Cleveland Cavaliers awaiting the winners of the TD Garden clash. Monday night's Game 7 in Boston will be Washington's first since 1979. "I wear black all the time", Thomas said.

UK: May Plays Down Talk Of Possible Landslide General Election Victory
The SNP's success in ending Labour's control of Glasgow council was matched by an eight point increase in support across the city. The election results showed the SNP in the ascendency, with the Tories and Labour "scrapping for second place", she said.

After UNESCO Jerusalem vote, Israel cuts UN funding
Media reports say that Israel's share of funding to the United Nations will thus this year total around 2.7 million dollars. Israel considers the entire city to be its capital, including East Jerusalem, which it captured in the 1967 Mideast war.

Jose Mourinho Worried About Eric Bailly's Europa League Red Card
You can see why they have struggled to beat teams at Old Trafford this season. "They will be just as eager as us to lift the cup". The game changed dramatically when Roncaglia headed home Theo Bongonda's cross.

Visual Studio 2017 for Mac is now generally available
This is the first time Microsoft's flagship coding tool has made its way across and into Apple's territory. The Visual Studio supports Visual Studio Code for Mac and is free to download from their website.