Oil prices plunge to one-month low after United States stocks rise
- Author: Zachary Reyes Jun 09, 2017,
Jun 09, 2017, 19:12
Commodities brokerage Marex Spectron said it expects a "lower supply of crude oil on the physical market" in the coming weeks, lending oil prices some support. USA benchmark futures on oil have slid more than 11 percent in 10 days of trading.
US crude imports rose last week by 1.1 million bbl/d.
"It's not clear what impact the spat will have on oil supplies", Citi Futures analyst Tim Evans wrote in a research note Monday. The fall in inventories at Cushing also helped oil prices.
West Texas Intermediate for July delivery slid $1.99 to $46.20 a barrel on the New York Mercantile Exchange at 11:11 a.m.in New York. USA crude oil (UCO) (FXN) (SCO) prices fell in post-settlement trade on June 6, 2017, despite the fall in inventories.
The main reason for the decline in the market is that investors were disappointed in OPEC and its lack of a coherent plan to salvage the crude oil market.
Output will average 10.01 million barrels a day next year, topping the previous high of 9.6 million in 1970, according to the Energy Information Administration's monthly Short-Term Energy Outlook. Traders are concerned the glut in the oil market is growing again.
The spat adds to other doubts about whether the agreement can support prices, including rising production from countries exempt from the agreement - Libya and Nigeria.
Distillate inventories also rose this week by 1.75 million barrels, while inventories at the Cushing, Oklahoma, site fell by 1.56 million barrels. The deal to reduce oil production sounds halfhearted since it moves one-step forward and two steps backwards.
"The relentless increase in USA oil production appears to have the market anxious that the OPEC cuts will be completely nullified by the increased U.S. production", said William O'Loughlin, analyst at Rivkin Securities.
"The relentless increase in U.S. oil production appears to have the market anxious that the Opec cuts will be completely nullified by the increased United States production", said William O'Loughlin, analyst at Australia's Rivkin Securities. OPEC must find ways to drain the deluge of oil in storage if it is serious about forcing an increase in global oil prices.