Published: Sat, February 10, 2018
Global | By Craig Ferguson

Crude oil futures fall Rs 19 on weak global cues

Crude oil futures fall Rs 19 on weak global cues

The new data helped move the global market following the report.

New data shows that USA crude stockpiles increased by 1.9 million barrels last week, contradicting an earlier report that said inventories had dropped.

Following a spike in USA bond yields generating fears of a potential increase in inflation and higher interest rates, the financial markets tanked on Monday.

U.S. West Texas Intermediate and international-benchmark crude oil futures are trading lower on Friday for a sixth consecutive session.

Brent crude price was at $65.28 per barrel down 23 cents, or 0.4 percent, from the previous close.

The current crude price action makes fundamental sense as supply is dwindling with OPEC oil production control in place.

The US has returned to "bona fide energy superpower status", says David Sheppard in the Financial Times.

Investors in crude are still sitting on one of the largest bullish positions in history. "The timing probably has something to do with over speculation and an overheated market, but fundamentally things are going to head down from here".

Crude is struggling to extend last month's largely dollar-driven gains on speculation that United States output will impede efforts by the Organization of Petroleum Exporting Countries (OPEC) to drain a glut.

"We think that surging supply and slowing demand growth will tip the market back into a surplus this year", analysts at Capital Economics said in a note. We stopped in a corridor to admire art work on the walls showing various oil installations ... and they said the number of shale oil rigs has nearly doubled in two years - and they're more efficient then ever. But that narrative proved to be false. Output has declined from 3.07 million at the end of 2016 as OPEC and allies cut production to reduce a global glut and prop up prices.

The US Energy Information Administration raised its domestic production forecast to 10.59 million barrels per day, which is 300,000 barrels per day more than last week's expectations.

"It is now clear that oil prices in late January were too high to keep the oil market balanced in the long term", Commerzbank analysts wrote.

With the energy sector in a more favorable light, investors are looking to capitalise on stocks that remain cheap despite a gain of more than 4 per cent for the year.

"As a member of OPEC and a large crude producer, I would imagine they would be very self-sufficient in their own crude supply", said Andy Lipow, president of Lipow Oil Associates LLC.

Gasoline futures fell 3.23 cents, or 1.66%, to $1.9079 a gallon.

U.S. West Texas Intermediate (WTI) crude was down $1.86, or 3 percent, at $59.29, its lowest since December 26.

Like this: