Oil prices down about 1 per cent
Oil prices fell about 1 per cent in trading on Monday on concerns that an extension of OPEC cuts has not been confirmed, along with Russia’s claims that it will lift its output if the OPEC deal lapses and increasing US shale production.
Reuters reports Russian officials and oil firms say Russia’s oil output could climb to its highest level in 30 years if OPEC and non-OPEC producers do not extend the supply cut deal beyond June 30.
“We think an extension is highly likely, with a growing OPEC consensus in support of that policy, but the market seems to be attributing last week’s decline to the lack of a firm agreement,” Tim Evans, Citi Futures’ energy futures specialist, said in a note.
“In our view, the drop had more to do with correcting the prior excess optimism and speculative excess, than with any shift in the underlying fundamental scenario, but those requiring a fundamental explanation … will focus on OPEC or U.S. production growth instead.”
In trading last week, oil prices slumped about 7 per cent.
On Monday, Brent crude futures ended 36 cents lower at $51.60/barrel after hitting a session high of $52.57/barrel.
WTI crude futures dropped 39 cents to end the day at $49.23/barrel, after reaching a session high of $50.22/barrel.
“From a technical perspective, the June WTI contract has now broken another key Fibonacci level, specifically the 61.8 per cent retracement of the rally from March 22 to April 12,” David Thompson, executive vice-president at Powerhouse told Reuters.
“In addition we are close to breaking a long-term uptrend line that has been in force since early August of last year.”
Traders and brokers also noted that crude markets were lower despite a relief rally following the first leg of the French election and a noticeably weaker US dollar.
Recently, increasing US drilling and production has quelled any oil price rally.
According to the Baker Hughes rig count for the week ending April 21, US drillers added oil rigs for the 14th straight week. The rig count sat at 688 on Friday, extending an 11-month recovery that is expected to result in the biggest monthly US shale production increase in over two years.
At 9.3 million b/d, US crude production is up almost 10 per cent since mid-2016, and is approaching Saudi Arabia’s output.
when are the oil people, such as the American petroleum institute; that oil has nothing too do with the price of oil!? we do not refine oil into gasoline and have not done so, since Katrina destroyed the refineries. the congress refused too renew the permits to the refiners. so we buy gasoline already to go. NOT RELATED too the price of oil, go look up the commodities range today.