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(The Guardian) A crude oil importing port. Oil may be a precious and dwindling resource, but at the moment, at least, it looks like we just have too much of it. Crude-oil prices are now at their lowest since early April, hit by continued oversupply, concerns about global demand and negative price sentiment by oil-market participants. And that situation looks likely to continue in the near future.
The US crude oil benchmark price, West Texas Intermediate (WTI) traded at the New York Mercantile Exchange, closed at $39.51 a barrel on Tuesday, the first time since 6 April. The global Brent crude oil benchmark closed at $41.50 on Tuesday, a three-and-a-half-month low. As of midday Wednesday, prices were just above those levels.
Prices rebounded by the end the week following a better-than-expected July US jobs report . September WTI crude oil settled at $41.83 a barrel and October Brent closed at $44.28. But US petroleum prices are down about 25% from the June highs of around $52, putting them in bear-market territory. However, they remain above the depths of the decade-plus price lows established in February, when US prices fell below $30 a barrel.
(The Guardian) Some of the reasons for crude oil’s June rise are also responsible for its current retreat, market watchers said. There was a series of supply outages earlier this year, said Bill O’Neill, a principal at the commodities consulting group Logic Advisors, such as Canadian wildfires in the oil-sands region, sharp production decreases in Nigeria and Libya and an oil workers’ strike in Kuwait.
“Those have been more or less solved, or been alleviated. So we’re seeing a glut of supply as production in most of those areas is returning,” O’Neill said.
At the time there were hopes the production outages and relatively lower prices would mean higher demand would drain the bloated inventories to finally bring the crude oil market back into balance between supply and demand, said Rob Haworth, senior investment strategist at US Bank Wealth Management.
However, when US crude-oil prices hit $50, it encouraged some US shale-oil producers to open the spigots again, as evidenced by a […]