Oil prices remain steady as investors focus on prospect of tighter supply

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Oil prices fell on Thursday, extending losses into a second straight session, after widely watched data showed a surprising increase in U.S. stocks.

The surge in imports came as the OPEC kingpin producer boosted its share of the Asia market, signing new 2019 term supply contracts with Chinese refiners including Sinochem-Hengli and Rongsheng among others, said Mark Tay, senior analyst for crude oil with Thomson Reuters Supply Chain and Commodities Research, in a note.

Crude oil prices edged lower on Monday, as fears of a drop in energy demand due to global economic slowdown outweighed optimism over OPEC-led supply cuts and the USA sanctions on Iran and Venezuela.

Crude oil futures fell by 0.22 per cent to Rs 4,066 per barrel Monday as speculators reduced positions amid a weakening trend overseas.

"Production cuts from the OPEC+ group of producers have been the main reason for the dramatic recovery since the 38 percent price slump seen during the final quarter of previous year", said Ole Hansen, head of commodity strategy at Saxo Bank.

"The oil market was anxious about a global recession, and now we're kind of shaking that off and thinking that if the USA stock market can turn higher, maybe things aren't so bad", said Phil Flynn, an analyst at Price Futures Group in Chicago.

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Immediately following Trump's tweet, U.S. crude oil futures fell by more than $1 to $58.33 a barrel and Brent futures were down by more than $1 to a session low of $66.76 per barrel. "Thank you!" Trump tweeted.

"Very important that OPEC increase the flow of Oil". OPEC's de-facto leader, Saudi Arabia, appears to be pushing for a Brent crude price of over $70 per barrel.

"So far, demand concerns have not proven too much of a headwind", analysts at JBC Energy wrote.

Wednesday's weakness suggests growing fears over the impact of a global economic slowdown on demand.

"Business confidence has weakened in recent months". On the eve of an OPEC meeting in December, his call to keep production high was disregarded by the group and its allies, who announced an output cutback of 1.2 million barrels a day that they're now implementing.

Heading towards 2020, however, the bank warned of a recession.