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

FSMNews

FSMNews

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

  • CP commemorates the centennial of the Battle of Vimy Ridge

    They represented every region of Canada and fought for the values we hold so dear-freedom, democracy and peace. They've been in the country since Thursday, visiting historic sites from the First World War.
    Ronaldo's milestone goal gives Real advantage

    Ronaldo's milestone goal gives Real advantage

    Zidane said he wasn't sure if Bale would be ready to play the return leg of the quarterfinal against Bayern next week. Arturo Vidal headed Bayern into the lead, but then skied a penalty attempt on the stroke of half-time.
    Monaco vs. Borussia Dortmund live stream

    Monaco vs. Borussia Dortmund live stream

    Thomas Tuchel has admitted his Borussia Dortmund side simply weren't up to scratch as they crashed out of the Champions League . Borussia Dortmund trail Monaco by 3-2 in this interesting Champions League tie.
  • Sharks hammer Oilers 7-0, tie series at two wins each

    Sharks hammer Oilers 7-0, tie series at two wins each

    And if they don't, you can bet general manager Peter Chiarelli won't be keeping everyone around to learn those lessons. The Sharks have averaged 27.7 shots per game over their first three games of the series, fourth-lowest in the playoffs.
    Trump spokesman Sean Spicer says he 'screwed up' with Hitler comments

    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.
    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.
  • 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.
    Electric SUV from China Looks Pretty Legit

    Electric SUV from China Looks Pretty Legit

    All the better for nabbing lap records around the Nürburgring and the Circuit of the Americas. The length of the vehicle is over 196 inches long and the wheelbase is over 118 inches long.
    France says to provide proof on Syria government chemical weapons use

    France says to provide proof on Syria government chemical weapons use

    Thus, the criticism that Assad continues to launch air strikes, from the base we hit or from elsewhere, misses the point. The findings supported earlier testing by Turkish and British laboratories.
  • 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

    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.

    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".

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.