Published: Tue, March 13, 2018
Business | By Max Garcia

Oil Prices Fall On Concerns Over US Output

Oil Prices Fall On Concerns Over US Output

The U.S. report of larger than expected supply reports from last week is looking to extend this week according to most market speculations.

Energy services firm Baker Hughes said on Friday that energy companies last week cut oil rigs for the first time in nearly two months. Crude oil prices could weaken if the dollar rallies and stocks weaken.

The high volatility of trading oil, and it being one of the most actively traded commodities in the world, makes it a sought after and an appealing market for investors to get in to.

Oil markets rose yesterday on the heel of a drop in the number of United States rigs drilling for more production and as the USA economy continued to create jobs, which industry hopes will drive higher fuel demand.

However, if predictions from Warren Patterson, a commodities strategist at ING Groep NV, prove accurate, Iran has nothing to worry about: because US activity is angering OPEC allies to the degree they will soon abandon the cartel's production cutback deal, pump all out, and drive prices back down again.

USA production is also expected to rise above 11 million bpd by late 2018, taking the top spot from Russian Federation, according to the International Energy Agency (EIA). Total output should now average 10.7 million barrels a day this year, up from a previous forecast of 10.6 million barrels a day.

Reuters reports that U.S. West Texas Intermediate (WTI) crude futures were sold at $61.18 a barrel at 0747 GMT, down 18 cents, or 0.3 percent, from their previous close.

Brent crude futures LCOc1 were at $64.80 per barrel, down 15 cents, or 0.2 per cent.

On the other hand, the Iranian oil minister Bijan Zanganeh mentioned that the Organization of the Petroleum Exporting Countries or OPEC is going could come to a conclusion on their June meeting to ease the current production curbs by the year 2019.

More importantly, the price is expected to hit lower levels as the United States continues to take the lead as per oil production in the market, overtaking Saudi Arabia in the process.

Also on Sunday, Saudi officials said they would be delaying the initial public offering of Saudi Aramco until 2019.

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