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

Comments

Hong Kong Lunar New Year Celebrations Erupt in Violence as Police Clear Food Stalls

Hong Kong's Lunar New Year celebrations have descended into chaos as police leared illegal food stalls set up on a busy junction for Lunar New Year celebrations, leaving dozens injured or arrested. Riot police used batons and pepper spray and fired warning shots into the air early on Tuesday after authorities tried to move illegal street vendors from a district in the city. Protesters hurled bricks at police as scuffles broke out, while other demonstrators set fire to rubbish bins in the streets of Mong Kok, a gritty neighbourhood across the harbour from the heart of the Asian financial centre. A police statement said that three men aged 27 to 35 were arrested for assaulting a police officer and obstructing police, while another three police officers received hospital treatment. Broadcaster RTHK said later that 24 people had been arrested. The scuffles broke out after police moved in to clear "hawkers", or illegal vendors who sell local delicacies, trinkets and ...

Trump Allowed Military To Set Up The Number of Troops in Afghanistan

The President of the United States, Donald Trump, has given the Secretary of Defense, Jim Mattis, an authority to to set troops deployed in Afghanistan. As reported by Reuters, the decision also allowed an opportunity for the secretary to increase the number of personnel in Afghanistan that are currently 8,400. The decision was taken shortly after Mattis warned Congress that the Afganistan troops which is backed by U.S. could not defeat the Taliban after 15 years of fighting. "We never win in Afghanistan. We will fix this as soon as possible," said Mattis said the Senate Armed Forces Committee, Tuesday (13/6), as quoted Reuters. Earlier, the General of U.S. Army, John Nicholson, also said that he needs "a few thousand" soldiers deployed in Afghanistan, as additional. Some officials said, U.S. estimated around 3,000-5,000 soldiers was needed for the air force crew and helped training the Afghanistan troops. However, other officials question the advantag...

Kit Harington Confirms He Filmed New Game of Thrones Scenes, But Only As A Dead Body

We're hardly waiting for it, Game of Thrones. We all know Jon Snow will be back in some shape or form this season, and at this point we're ready for the show to just come back already and stop teasing us. Enough with the cagey interviews, the oh-look-everyone-is-dead promos, and all the other taunting we've had to put up with for the past year. Just give us our beautiful show and let us be shocked in peace! Kit Harington, the portrayer of the dead guy in question, is the one who's confusing us this time. Instead of just saying "you'll have to wait and see," or some other kind of spoiler-free stock answer about future plot points (like he gave last time he was asked), Harington is now just feeding us lies. In an interview with Time Out London that was supposed to be about the West End play he's in, Harington claimed he's done with Game of Thrones. "Look, I'm not in the show anymore. I'm definitely not in the new series,...

Best I News!

Search This Blog