Crude Oil Drops Again as Markets Sour on OPEC Output Cut Deal

Crude oil prices continued to fall. Performance so far this week has amounted to the steepest two-day decline since late October. Interestingly, the decline doesn’t seem to have followed from API weekly inventory data showing stockpiles added 1.53 million barrels last week. By the time this news came out, the WTI benchmark had settled into a choppy consolidation range after a long day of selling.

As noted yesterday, the OPEC output reduction scheme cobbled together late last year may be losing its ability to impress investors as they consider the degree to which higher prices will lure swing producers back into the market. As if on cue, the EIA upgraded its 2017 US crude output forecast yesterday to 9m b/d from 8.78m projected in December.

Concerns about output cut compliance in Iraq – OPEC’s second-largest producer – are hardly helping matters. Shipping data shows exports are set to increase in February (according to Bloomberg) all while the country’s oil minister says production is being scaled back. The official set of EIA inventory figures is in focus ahead, with an increase of 930k barrels expected by economists.
http://finance.yahoo.com/news/crude-oil-drops-again-markets-044100214.html

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