Crude prices fall on US holiday after eight days of gains

LONDON: Oil prices fell on Wednesday, halting a run of eight straight days of gains on signs that a persistent rise in US crude production is running out of steam.

Brent crude futures fell by 22 cents to $49.46 per barrel by 0927GMT.

US West Texas Intermediate (WTI) crude futures were trading down 20 cents at $46.87 a barrel.

The falls came after both benchmarks recovered around 12 per cent from their recent lows on June 21. Many traders closed positions ahead of the US Independence Day holiday on July 4, while Brent also faced technical resistance as it approached $50 per barrel, traders said.

Late May and most of June were overwhelmingly bearish as US output rose and doubts grew over the ability of the Organisation of the Petroleum Exporting Countries (Opec) to hold back enough production to tighten the market.

But sentiment began to shift towards the end of June, when US data showed a dip in American oil output and a slight fall in drilling for new production.

“The fact that prices have not come under any noticeable pressure of late points to a shift in sentiment,” Commerzbank said on Tuesday.

“This may be related to the fact that most of the ‘ shaky hands’ have withdrawn from the market by now,” the bank added.

Prices rose in recent days de-

Brent crude futures fell by 22 cents to $49.46 per barrel by 0927GMT. US West Texas Intermediate (WTI) crude futures were trading down 20 cents at $46.87 a barrel.

spite Opec production hitting a 2017 high of 32.72 million barrels a day in June, according to a Reuters survey.

The group’s efforts to rebalance the market have been undermined by rising production from Libya and Nigeria, who are exempt from the cuts.

Libya is currently pumping around 1 million bpd of crude, a four-year high.

“We see a recovery for oil prices in H2 2017 from current levels, with Opec production cuts, a slowdown in global supply growth and seasonally firming demand driving up prices,” BMI Research said, although it added that “large-volume supply additions will keep price growth flat year on year in 2018”.