June 22, 2018

Oil prices give up gains; set for weekly drop

04 March 2018, 03:57 | Lorenzo Hawkins

Oil prices moved lower Wednesday after the U.S. Energy Information Administration reported that domestic crude supplies rose by 3 million barrels for the week ended February 23.

The U.S. West Texas Intermediate crude April contract, according to, was down about 0.34% at $60.80 a barrel by 07:45 GMT, just off Thursday's two-and-a-half week lows of $60.20. Brent Crude Oil price at London's IСE Stock Exchange down by 1.27% to $63.88 per barrel. Global oil prices could recover at around US$70 per barrel following the cuts. Those settlement prices represented a modest recovery from session lows, when benchmarks had slid more than a dollar.

A surge in North American crude output also has the market anxious, despite efforts by the Organization of the Petroleum Exporting Countries and external producers such as Russian Federation to limit global crude production.

USA light crude CLc1 is forecast to average $58.88 a barrel in 2018, up from $58.11 in the January poll.

Still, both benchmarks ended the week lower, snapping a two-week streak of gains, with US futures tumbling 3.62% during the week and Brent falling 3.98%. West Texas Intermediate, the USA benchmark for the price of oil, was up 0.37 percent to $63.24 per barrel.

U.S. crude output slipped in the last month of 2017, but in November hit an all-time high of 10.057 million barrels per day (bpd). An early-week survey from commodity pricing group S&P Global Platts showed an expected gain of 2.1 million barrels of oil last week, while the American Petroleum Institute reported a gain of 933,000 barrels in USA crude oil inventories.

U.S. oil prices edged up on Friday, snapping three days of declines, but gains were limited as Asian share markets extended a selloff on Wall Street after news of planned United States tariffs on steel and aluminium raised fears of a trade war.

The (), which measures the greenback against six major currencies, increased for a second day on Wednesday and was slightly higher on Thursday.

"The standoff "shale versus sheikh" continues to frame the oil market, with the former again gaining the upper hand", said Norbert Ruecker, head of macro and commodity research at Julius Baer.

Opec's cut, which began a year ago, has helped boost prices from levels below US$30 seen in January 2016.

"Yesterday's report. has reawakened concerns that USA production levels will offset Opec production cuts", said McGillian.

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