Economy

Oil markets stable, but doubts over recent bull run emerge

Oil markets stable, but doubts over recent bull run emergeā€

Oil prices may be approaching the point at which shale oil producers in the United States kick into overdrive, undermining an approach by the Organization of Petroleum Exporting Countries to correct an oversupplied market with coordinated production cuts.

The American Petroleum Institute (API) reported a weekly draw of 1.562 million barrels in USA crude oil inventories, against an S&P Platts' survey of analysts that expected inventories would dwindle by 2.7 million barrels.

The West Texas Intermediate for December delivery ticked down 0.15 USA dollar to settle at 57.20 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery lost 0.58 dollar to close at 63.69 dollars a barrel on the London ICE Futures Exchange.

Brent crude hit $64.65 earlier this week, its highest since mid-2015, as political tensions in the Middle East escalated after a sweeping anti-corruption purge in top crude exporter Saudi Arabia, which in turn has confronted Iran over the conflict in Yemen.

"This may result in lower prices in 2019", FGE said. Still, traders expressed caution that the oil price rally may have run its course after pushing up Brent more than 40 percent since July.

United States light crude CLc1 was up 46 cents or 0.8% at US$57.27, just shy of this week's more than two-year high of US$57.69 a barrel.

The rally has largely been driven by crude output cuts from producing nations led by the Organization of the Petroleum Exporting Countries and Russian Federation.

OPEC will discuss output policy during a meeting on November 30, and it is expected the group will extend the cuts beyond the current expiry date in March 2018.

In its short-term market report, published Tuesday, the U.S. Energy Information Administration raised its growth forecast for next year by about 6 percent to 720,000 barrels per day, to give an average production rate for next year of 9.95 million barrels per day.

Brent futures have gained around 14 percent in the last month alone, propelled largely by evidence that output cuts by OPEC and its partners are reducing the global oil glut.

Key for the last weeks of the year is whether traders remain confident about their huge bets on further price rises, or whether they sell out of these positions, satisfied with recent strong gains.

"It doesn't matter how bullish the fundamentals are ... when an asset goes vertical there is always room for a pullback and consolidation of recent price moves", said Greg McKenna, chief market strategist at brokerage AxiTrader.



Like this

Latest


10 November 2017
Serena Williams tennis comeback: Australian Open, legend eyeing January return, rapid recovery
Jamaican-American singer Sean Kingston , 27, made a shocking revelation that he had sex with tennis star Serena Williams , 36, in a recent interview with BBC Radio 1's Smashed With Sloth.

10 November 2017
Swedish radio station: Pirate broadcaster plays pro-IS song
The hacking in Sweden comes as the FBI is investigating how a New Jersey school district's website was hacked on Tuesday and replaced with pro-ISIS propaganda instead.

10 November 2017
Mogherini Says EU To Preserve Iran Nuclear Deal
EU Foreign Policy Chief said Iran deal is "a major achievement of European and global multilateral diplomacy that is delivering". From Washington, Amano also hailed Iran for remaining fully committed to its side of the deal.

10 November 2017
Radioactive cloud could form over Russian Federation
A cloud of radioactive pollution has appeared over Europe since the past few weeks, arousing speculations about its source. The French regulator said the accident happened south of the Ural mountains, between the Urals and the Volga river.

10 November 2017
Undercover video shows worker kicking cows at dairy farm
Numerous cows being hit appear to be confined in stalls where they can not escape. "Very disappointing to me", said Larson. Surveillance video acquired by an undercover ARM investigator shows employees beating the cows, Local 10 News reports .

10 November 2017
Religious parties announce restoration of Muttahida Majlis-e-Amal
The alliance consolidated its position during the general elections in Pakistan held in 2002 during the rule of Pervez Musharraf. The leaders of the parties expressed hope that under the MMA platform they will perform well in the 2018 elections.

10 November 2017
Sharon Horgan Latest News, Photos, and Videos
As Kyle Chandler's Brooks explains in the footage, things are dialed up a notch with a new murder-mystery game. Mark Perez , John Davis and John Fox wrote the movie, whilst Bateman and Jim Garavente serve as producers.

10 November 2017
La Nina to bring warm, dry conditions to Jacksonville through winter
The period cycles through every 3 to 7 years. "Typically La Nina is not a big snow year in the mid-Atlantic", Halpert said. Indonesia, the Philippines, northeastern South America and South Africa often see more rain during La Nina winters.

10 November 2017
Malky Mackay: I've picked Aberdeen trio on merit
Mackay named Celtic's Kieran Tierney as captain, in only his ninth worldwide appearance, and played him at centre-back rather than full-back.

10 November 2017
Air pollution can cause weaker bones, increase risk of fractures
For older adults, even a small rise in PM2.5 concentrations would lead to an increase in bone fractures, the researchers noted. It does not have any symptoms before a break occurs as the result of a usually harmless impact, such as a hug.



Recommended