Northern harvest rv Crude oil edges up after 6 straight days of decline
Oil prices inched up on Tuesday, but markets remained under pressure following six consecutive sessions of declines as traders lose confidence that pledged output cuts will rein in oversupply in a world awash with fuel.
Brent crude, the international benchmark, added $ 0.10 to $ 49.33 per barrel at 5: 53 pm Beijing time.
Traders said the gains were a counter- reaction to consecutive price drops in the previous six sessions.
Market sentiment has turned bearish, with Brent down 10 percent since late 2016 despite efforts led by the Organization of the Petroleum Exporting Countries ( OPEC) and Russia to cut output by 1.8 million barrels per day ( bpd) in the first half of 2017 in order to tighten the market.
Given that oil supplies remain at record highs despite the cuts, Stephen Schork of the Schork report said on Tuesday that “OPEC has failed miserably in its endeavor to balance the oil market.”
JPMorgan said in its latest weekly market note to clients that “it is evident that... crude markets are still struggling to clear [ oversupply].”
Indicating its cautious outlook, JPMorgan said that “crude markets are close to floating storage economics and [ this] is a bearish sign for output price developments.”
Floating storage is a clear indicator of oversupplied markets. It is pursued when oil for immediate delivery is so much cheaper than that for future dispatch that it becomes profitable for traders to charter tankers to store it for later.