Skip to main content

Oil Prices is Getting Stabilize on U.S. Rig Count, but Global Glut Still Weighs

Following steep losses in the previous session, supported by a fall in the number of U.S. production rigs in use, oil prices partly recovered on Monday. But analysts said general oversupply was keeping the market weak.

Pump jacks are seen at the Lukoil company owned Imilorskoye oil field, as the sun sets, outside the West Siberian city of Kogalym, Russia, January 25, 2016.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $29.90 per barrel at 0213 GMT, up 26 cents from their last settlement. International benchmark Brent LCOc1 was up 34 cents at $33.35 per barrel. Both contracts fell almost 4 percent on Friday.

A falling rig count in the United States which is expected to lead to a decline in 2016 production helped support prices, analysts said.

"The U.S. oil rig count continued to decline..., with a total of 26 rigs idled," Goldman Sachs said in a note to clients. "The current rig count implies... annual average U.S. production would decrease by 445,000 barrels per day yoy (year-on-year) on average in 2016," it added.

Despite Monday's gains, analysts said that market conditions remained weak due to an ongoing glut.

Record U.S. crude stocks of 504.1 million barrels pulled back gains from last week's relief rally on the announcement of a production freeze by Russia and the Organization of the Petroleum Exporting Countries (OPEC).

"Crude stocks in the U.S. are at record highs and production is also at or near records and remains way above daily demand, so freezing production at current levels won't reduce the glut, but will actually add to it further," one oil trader said.

With production outpacing demand by 1 million to 2 million barrels every day, crude prices have fallen around 70 percent since mid-2014.

Analysts also said that some producers seemed to show little commitment to a deal reached by Russia and OPEC leader Saudi Arabia, and supported by Qatar and Venezuela, to freeze output at January levels.

"The lack of commitment from some OPEC members on a production freeze remains the key headwind short term," ANZ bank said on Monday.

OPEC-member Iran has shown little interest in restraining production as it was only allowed a full return to oil markets in January following years of sanctions.

Reuters market analyst Wang Tao said that U.S. WTI crude prices could fall below $28 per barrel, based on technical chart data.

Source : Reuters
Labels:

Comments

Post a Comment

Popular posts from this blog

Zika Virus is Proved Causing Birth Defects

Officials at the Centers for Disease Control and Prevention has confirmed on Wednesday that there was now enough evidence to say that the Zika virus could cause unusually small heads and brain damage in infants born to infected mothers. A therapist teaching a mother in Recife, Brazil, last month how to massage her baby, who has microcephaly. The conclusion should settle months of debate about the connection between the infection and these birth defects, called microcephaly, as well as other neurological abnormalities, the officials said. “There is no longer any doubt that Zika causes microcephaly,” said Dr. Thomas R. Frieden, the C.D.C. director. He said the conclusion, reached after evaluating “mounting evidence from many studies,” signifies “an unprecedented association” in medicine. “Never before in history has there been a situation where a bite from a mosquito can result in a devastating malformation,” Dr. Frieden said. ...
Post a Comment
Read more

Nigerian army Claims the Second Rescue of Chibok Girl

A second schoolgirl that was seized in the Nigerian town of Chibok has been found, the army says. But a spokesman for the Chibok girls' parents has cast doubt on the claims, saying that the girl's name is not on the families' list of those missing. An army spokesman said Serah Luka was among a group of 97 women and children rescued by troops in the north-east. Islamist militant group Boko Haram has abducted thousands of other girls in recent years, rights groups estimate. This comes two days after the rescue of the first Chibok girl, Amina Ali Nkeki. The army has previously given misleading statements about the rescue of the Chibok girls - in its initial statement after Ms Nkeki was found, it used a wrong name. In all, 218 girls remain missing after their abduction by the Boko Haram Islamist group from Chibok secondary school in north-eastern Nigeria in 2014. Ms Nkeki told a Chibok community leader that six of the kidnapped girls had died, but...
Post a Comment
Read more

Will Ferrell and His Bird Collectian As "The Birds are for God"

An acclaimed actor and comedic genius like Will Ferrell is incredibly pleased to spend some valued time with his incredibly expensive bird collection, according to his good friend Adam McKay. McKay, who has directed Ferrell in films like "Anchorman" and "Step Brothers," told HuffPost Live on Monday that Ferrell's home is brimming with birds of all kinds, and Ferrell himself is a bit of a bird whisperer. "He has giant cages on his property filled with different tropical birds, and these are the kind of birds that will bite you, that you have to be careful with, but when it's him, they just fly right to his arm," McKay said. "Often times if you're at his house ... he has, like, a cockatiel on his shoulder for long stretches." An affinity for birds isn't exactly surprising, but what will shock you is the enormous monetary value of Ferrell's flock. "He had to have his bird collection insured, and I think it's wor...
Post a Comment
Read more