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Oil starts the week with heavy losses as United States drilling weighs

21 March, 2017, 00:29 | Author: Paula Vaughn
  • Crude oil

Oil prices settled at their lowest level in almost a week, as another rise in active US oil rigs renewed concerns over domestic production and some analysts anxious that a change to the G-20 policy statement may impact global trade. The U.S. West Texas Intermediate has declined by a massive 7.25% to around $47.95 per barrel.

"Sentiment remains bearish towards oil and the fading optimism over the effectiveness of [the Organization of the Petroleum Exporting Countries'] supply cut deal could encourage sellers to attack prices further", he said.

Brent crude, the global benchmark, has dropped by nearly 7pc this month to $51.79/barrel while USA marker West Texas Intermediate has fallen by almost 10pc to $48.73/barrel.

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Opec has raised its 2017 estimates for oil production from outside of the cartel as USA shale drillers ramp up activity in response to higher prices, underlining the threat to the group's attempts to balance the market.

The real world of oil trading - where actual cargoes are bought and sold - is doing little to help the hedge funds and other speculators who placed record bets that OPEC and its allies would drive up prices. Global stockpiles will decline by about 500,000 barrels a day in the first half of this year if OPEC sticks to its pledged cuts and all other market factors remain constant, according to the IEA.

Give income, asset details in 15 days, Adityanath to ministers
Investment will be promoted for industrial development and it will be done for economic development", Adityanath added. A senior Congress party leader, Veerappa Moily, said Adityanath's selection was "an assault on secularism".

OPEC next meets to decide output policy on May 25 in Vienna. As reports about the strong compliance rates began to filter out in early 2017, prices moved even higher.

As populist candidates and parties continue to perform well in elections across Europe and the USA, the impact this shift will have on the workings of the world economy still remain unclear.

US oil output has risen to over 9.1 million bpd from below 8.5 million bpd in June past year.

"Supply is still plentiful across the Atlantic basin as can be seen in the high arbitrage volumes targeting Asia", due in part to a boost in production in the Mediterranean region and Brazil, JBC analyst Eugene Lindell said.

Meanwhile, encouraging economic data from the second biggest economy and the largest copper consumer China have raised expectations of higher demand for the commodity, which in turn have led to an increase in prices.

However, domestic production began to stabilize as oil prices approached the $50-per-barrel mark a year ago.

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