Oil prices fall as in­vestors' faith in rally wanes

The Pak Banker - - MARKETS/SPORTS -

Oil prices fell on Tues­day, re­flect­ing grow­ing con­cerns that a two-month rally may be in danger of fiz­zling, while an­a­lysts forecast an­other rise to record lev­els for U.S. crude stock­piles.

The oil price has risen by more than 45 per­cent since midFe­bru­ary ahead of a meet­ing next month be­tween the world's ma­jor pro­duc­ers to dis­cuss an out­put freeze to sup­port prices. But there is grow­ing scep­ti­cism about the out­come of meet­ing.

"The amount of ver­bal in­ter­ven­tion, which has ob­vi­ously helped the mar­ket greatly over the past two months, com­bined with a pro­duc­tion slow­down in the U.S., has prob­a­bly taken (oil) as far as it can, now the mar­ket re­ally wants to see some ac­tion," Saxo Bank se­nior man­ager Ole Hansen. "We're see­ing more and more com­men­ta­tors raise the flag and say­ing 'have we seen too much, too soon?' in terms of the rally across the sec­tor."

Brent crude futures LCOc1 fell 58 cents to $39.69 a bar­rel by 0846 GMT, hav­ing lost some six per­cent in the last six trad­ing days, while U.S. crude CLc1 fell 47 cents to $38.92.

OPEC and other ma­jor sup­pli­ers, in­clud­ing Rus­sia, are to meet on April 17 in Doha to dis­cuss an out­put freeze aimed at bol­ster­ing prices. But with bal­loon­ing global in­ven­to­ries, signs that some OPEC mem­bers are los­ing mar­ket share, plus lit­tle ev­i­dence of a strong pick-up in de­mand, an­a­lysts said oil is likely to trade in a range.

"The num­bers con­tinue to sug­gest a sup­ply glut and I sus­pect that more talk is rel­e­vant out of OPEC and Co to help the price stand up or to help it re­main rel­a­tively sta­ble," Jonathan Bar­ratt, Chief in­vest­ment of­fi­cer at Ay­ers Al­liance in Syd­ney, said. "The likes of Rus­sia and the likes of Iran ... are cutting deals left right and cen­tre just to get cash flow." US com­mer­cial crude oil stock­piles were ex­pected to have reached record highs for a sev­enth straight week, while re­fined prod­uct in­ven­to­ries likely fell, a pre­lim­i­nary Reuters sur­vey showed late on Mon­day.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.