Oil fu­tures fall

The Pak Banker - - MARKETS/SPORTS -

Oil prices fell on Wed­nes­day af­ter fig­ures from an in­dus­try group showed U.S. crude stock­piles rose last week more than ex­pected, re­in­forc­ing con­cerns that the global sup­ply glut con­tin­ues un­abated. The front­month con­tract in U.S. crude fu­tures was down 47 cents at $40.98 a bar­rel by 0753 GMT. It struck a 2016 high of $41.90 in the pre­vi­ous ses­sion be­fore clos­ing at $41.45. The con­tract has re­bounded more than 50 per­cent since hit­ting its low­est level since 2003 in Fe­bru­ary. Brent crude was 45 cents lower at $41.34, re­vers­ing gains in the pre­vi­ous ses­sion when it fin­ished at $41.79. Brent has also surged more than 50 per­cent since hit­ting a multi-year low in Jan­uary of $27.10 a bar­rel. "Net sup­ply in the short-term should still be in ex­cess and thus brings us to be­lieve that the cur­rent up­trend is un­sus­tain­able," said Phillip Fu­tures an­a­lyst Daniel Ang in a note on Wed­nes­day.

The Amer­i­can Pe­tro­leum In­sti­tute, an in­dus­try group, said in a re­port af­ter Tues­day's oil mar­ket set­tle­ment that U.S. crude stock­piles rose 8.8 mil­lion bar­rels last week to reach a record high of 531.8 mil­lion. The stock­pile growth re­ported by the API was 5.7 mil­lion bar­rels higher than es­ti­mates from an­a­lysts polled by Reuters. Of­fi­cial crude in­ven­tory data from the U.S. govern­ment will be re­leased later on Wed­nes­day.

The of­fi­cial US data is likely to show that oil in­ven­to­ries rose to a record high for a sixth straight week, while oil prod­uct stock­piles prob­a­bly fell, a sur­vey showed. "Near-term di­rec­tion is likely to cen­ter on the de­gree of in­crease in U.S. stock­piles," ANZ bank said in a note on Wed­nes­day. Adding to the glut is the re­vival of Ira­nian bar­rels on the in­ter­na­tional mar­ket af­ter sanc­tions were lifted in Jan­uary. Iran's crude oil ex­ports have risen to 2.2 mil­lion bar­rels per day (bpd) since sanc­tions were lifted, an in­crease of 900,000 bpd, a se­nior of­fi­cial was quoted as say­ing on Tues­day. "Un­til Jan­uary we could only ex­port 1.3 mil­lion bar­rels of oil but two months af­ter the sanc­tions we are ex­port­ing 2.2 mil­lion bar­rels of oil per day," Vice Pres­i­dent Eshaq Ja­hangiri was quoted as say­ing by the Shana agency.

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