Price of oil down in Asian trade
Oil prices fell in Asia Thursday after a rise in U. S. output to more than 30- year highs fanned fears over a global supply glut, ahead of the OPEC cartel’s meeting that is expected to see it maintain generous production levels.
U. S. benchmark West Texas Intermediate ( WTI) for July delivery fell two cents to US$ 59.62 while Brent eased five cents to US$ 63.75 in afternoon trade.
Analysts said dealers are con- cerned that producers are not pulling back on output despite an oversupply that has seen prices slump almost 50 percent over the past year.
The U. S. Department of Energy’s latest petroleum report Wednesday showed U. S. output rose 20,000 barrels a day to 9.59 million in the week to May 29 — the second consecutive gain and the highest since January 1983.
At its last meeting in November, the cartel, which pumps around 30 percent of the world’s oil, kept its official production target of 30 million barrels per day, in a move seen as trying drive high- cost U. S. shale oil producers out of the market.
That decision initially contributed to prices slumping to sixyear lows in January but some analysts say the strategy, backed by OPEC kingpin Saudi Arabia, has paid off as U. S. shale oil producers have been squeezed and crude has recovered in recent months.