Here's Why Oil Prices Dipped to almost $50 Today

Dr. Maan Fares cardiologist and vice department chair of Global Patient Services at Cleveland makes a point. — courtesy

Dr. Maan Fares cardiologist and vice department chair of Global Patient Services at Cleveland makes a point. — courtesy

The latest US government drilling data showed shale production in May was set to rise to 5.19 million barrels per day (bpd), with output from the Permian play, the largest USA shale region, expected to reach a record 2.36 million bpd.

Crude futures were trading more than 30 cents higher in Asia early Thursday, but the recovery, against a rout of almost $2/barrel at the previous day's close, was more likely bargain-hunting than the start of a full correction, as the weekly counter-seasonal build in United States gasoline inventories continued to weigh on market sentiment.

Oil was down 3.66% to $50.49 a barrel, while Brent Crude was down 3.55% to $52.94 a barrel.

Prices for natural gas, meanwhile, fell as the EIA reported a larger-than-expected weekly climb in USA supplies of the commodity.

OPEC leader Saudi Arabia tightened February crude oil exports to the lowest since mid-2015, official data showed on Tuesday.

The same report also mentioned that Iranian oil minister Bijan Zanganeh said that most oil producers support an extension of output cuts by OPEC and non-OPEC countries including Iran.

Gasoline stocks posted a counter-seasonal build of 1.5 million barrels, despite heavier refining activity.

Global benchmark Brent crude futures swooned as low as $54.61, the lowest since April 7, then settled down 47 cents at $54.89 a barrel.

"OPEC and Russian Federation would love to see the price higher but it requires a not yet achieved 100 percent non-OPEC compliance, combined with a slowdown in US production growth", Hansen told UPI in response to emailed questions.

US crude imports rose last week by 56,000 barrels per day.

Now the deal's participants must weigh whether another such agreement is worth it, given that any price increases would spur more USA production.

OPEC and non-OPEC producers said after talks in Kuwait last month that they were looking into extending the output cuts, as compliance with the agreement has increased.

A number of key OPEC members including top exporter Saudi Arabia support extending their supply cut into the second half of 2017 if all participating producers, including Russian Federation and other non-OPEC countries, agree, OPEC sources have told Reuters.

US crude's intraday low was also the weakest since April 7.

Oil dropped the most in six weeks after a report showed US gasoline supplies increased for the first time since February, while crude output keeps rising. Due to the long period of low energy prices, the authorities of the oil states are trying to find other sources of income.

Oil-producing nations are moving closer toward ending a global glut and re-balancing the crude market, and Opec will decide next month whether to extend its cuts in output beyond June, the group's Secretary-General Mohammad Barkindo said.

Recommended News

  • Giants score three runs on dribbler thanks to D-Backs' blunders

    On Monday, Moore's exit after allowing three hits was a prelude to Mark Melancon's first save in front of the home crowd. After a 4-1 win over the Arizona Diamondbacks, his teammates and Bochy were cautiously optimistic about Posey.
    Antarctica's Seasonal Meltwater Networks More Extensive Than Previously Thought

    Antarctica's Seasonal Meltwater Networks More Extensive Than Previously Thought

    He said it was "a stretch", though to say that surface rivers like that on the Nansen shelf would protect the ice. The different types of meltwater drainage systems could raise different possibilities for ice sheet stability.
    Ancelotti blames poor refereeing for Champions League defeat

    Ancelotti blames poor refereeing for Champions League defeat

    I'm not bothered about anything else, but I don't want them to whistle me. It was an unfortunate, undeserved and bitter defeat".
  • Trump admin orders review of Iran nuclear deal sanctions

    Trump admin orders review of Iran nuclear deal sanctions

    Notwithstanding, Iran remains a leading state sponsor of terror through many platforms and methods. Trump has repeatedly expressed his disdain for the agreement.

    Stocks on the Run - Steel Dynamics, Inc. (NASDAQ:STLD),

    The Company's divisions include steel operations, metals recycling operations, steel fabrication activities and Other Operations. The target price for Steel Dynamics Inc. 01/19/2017 - Steel Dynamics, Inc. had its " rating reiterated by analysts at Citigroup.
    Swedish police arrest suspect in truck-ramming attack

    Swedish police arrest suspect in truck-ramming attack

    On April 7th, at 14:53 in Sweden, an attack at the city centre of Stockholm sent hundreds of people running in fear. SVT , a Swedish national broadcaster, reported Saturday that officials found explosives inside the beer truck.
  • Neomorph Revealed In New 'Alien: Covenant' Pics

    Neomorph Revealed In New 'Alien: Covenant' Pics

    The third, and perhaps most interesting image shows a mysterious figure standing on the Engineer's home planet. Everything released to-date for the forthcoming Alien: Covenant film has looked wonderful .

    Hinting At Support, Obama Calls Centrist French Presidential Candidate Macron

    The first round of the French presidential election is scheduled for this Sunday, while the run-off is set for May 7. While prosecutors haven't identified the potential targets, Le Pen said on BFM television that "we are all targets".

    Trump spokesman Sean Spicer says he 'screwed up' with Hitler comments

    A spokesman for German Chancellor Angela Merkel said comparing Nazi war crimes to present-day situations "leads to nothing good". The attack in northern Syria left almost 90 people dead, and Turkey's health minister said tests show sarin gas was used.
  • Trump tweet-rages at marchers demanding tax returns

    Trump tweet-rages at marchers demanding tax returns

    For four decades, presidents and major party nominees have released some of their tax returns, with the exception of Gerald Ford. Trump appeared again on Hewitt's radio program and said of his returns, "we'll get them out at some point, probably".

    Family wants trauma researchers to examine Aaron Hernandez's brain

    The Patriots had no immediate comment, and President Donald Trump made no mention of Hernandez at the White House event. You can put on an act like nothing happened, but you've got a soul. "I don't believe that he would have killed himself.
    National Football League  to release 2017 schedule on Thursday

    National Football League to release 2017 schedule on Thursday

    The preseason opponents and schedules have already been set for the Seahawks, but the exact dates have yet to be determined. One waiting game is about to end, and with it, Vikings fans will be provided with details on all 16 regular-season games.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.