Oil is struggling to find legs after seven percent, but the mood remains weak



[ad_1]

Oil derivatives markets struggled to find their topic on Wednesday, after dropping by seven percent at the previous session, with strong supply and a spectrum of unstable demand.

Future crude oil derivatives West West Intermediate (WTI) were $ 55.54 per barrel at 0159 GMT, which is 15 cents since the last settlement.

International Brent crude oil prices rose by 4 cents to $ 65.51 a barrel.

The story continues under advertisements

Markets fell by more than 7% the previous day. Crude oil has lost more than a quarter of its value since the beginning of October, which has become one of the biggest falls since prices in 2014 crashed.

The downward price on the spot has turned the entire curve forward for crude oil to the head.

The price of the September clips was significantly higher than those for later delivery, a structure known as a downturn, which means a tight market, as it is insufficient to store the oil.

By mid-November, the curve went into contagion when raw prices for immediate delivery were cheaper than the prices for subsequent dispatch. This means excessive consumption of the market as it is attractive to store oil for later sale.

Petroleum products markets are burdened on two sides: an increase in supply and an increasing concern over the economic slowdown.

US production of crude oil from seven main shales is expected to amount to 7.94 million barrels per day in December (bpd.), Said the US Department of Energy Information Administration (EIA).

This increase in land-based production has helped the entire crude production in the US reaching a record 11.6 million bpd, making the United States the world's largest oil producer ahead of Russia and Saudi Arabia.

The story continues under advertisements

Most analysts expect US production to rise above 12 million bpd. in the first half of 2019.

"This, in our opinion, will limit any above $ 85 per barrel (for oil prices)," said Jon Anderson, Brand Manager of Vontobel Asset Management.

The increase in US production contributes to rising stocks.

US crude stocks increased by 7.8 million barrels a week, reaching US $ 2 to 432 million, as refineries cut production, the US Oil Institute reported.

The cartel of the Organization of the Petroleum Exporting Countries (OPEC) is worried about a leap in the supply and a fall in prices.

OPEC has increasingly been publicly announcing that it will begin to hold crude oil reserves in 2019 to tighten supply and support prices.

The story continues under advertisements

"OPEC and Russia are under pressure to reduce the current level of production, which is the decision we expect at the next OPEC meeting on 6 December," said Andersson.

This is set by OPEC with US President Donald Trump, who publicly supports low oil prices and has called on OPEC not to reduce production.

[ad_2]
Source link