OIL FALLS BE­LOW $70/BBL

US light crude fell for a 10th suc­ces­sive day, drop­ping un­der $60 a bar­rel to its low­est in eight months

Business Standard - - FRONT PAGE -

Oil prices fellto multi-month lows on Fri­dayas global sup­ply in­creased and in­vestors wor­ried about­the im­pact on­fuel de­mand of lower eco­nomic growth and trade dis­putes. The bench­mark Brent crude fell be­low $70 a bar­rel for the first time since early April, down over 18 per­cent since reach­ing four-year high sat the be­gin­ning of Oc­to­ber. Brent dropped $1.52 to a low of $69.13 be­fore re­cov­er­ing to around $69.55, down 4.5 per­cent for the week and 16 per­cent this quar­ter. US light crude fell for a 10 th suc­ces­sive day, drop­ping un­der $60 a bar­rel to its low­est in eight months.

Oil prices fell to multi-month lows on Fri­day as global sup­ply in­creased and in­vestors wor­ried about the im­pact on fuel de­mand of lower eco­nomic growth and trade dis­putes.

Bench­mark Brent crude fell be­low $70 a bar­rel for the first time since early April, down more than 18 per cent since reach­ing four-year highs at the be­gin­ning of Oc­to­ber.

Brent dropped $1.52 to a low of $69.13 be­fore re­cov­er­ing to around $69.55 by 08.00 pm, down 4.5 per­cent for the week and 16 per cent this quar­ter. US light crude fell for a 10th suc­ces­sive day, drop­ping un­der $60 a bar­rel to its low­est in eight months.

The US crude con­tract hit a low of $59.28, down $1.39 and off more than 20 per cent since its peak in Oc­to­ber. That put it in “bear mar­ket” ter­ri­tory, bor­row­ing a def­i­ni­tion used in stock mar­kets.

“Oil prices are be­ing hit by the dou­ble whammy of ris­ing sup­plies and de­mand con­cerns,” In­ter­fax Eu­rope an­a­lyst Ab­hishek Ku­mar said.

Oil peaked in Oc­to­ber on con­cerns that US sanc­tions on Iran that came into force this week would deprive the oil mar­ket of sub­stan­tial vol­umes of crude, drain­ing in­ven­to­ries and bring­ing short­ages in some re­gions.

But other big pro­duc­ers, such as Saudi Ara­bia, Rus­sia and shale com­pa­nies in the US, have in­creased out­put steadily, more than com­pen­sat­ing for lost Ira­nian bar­rels. The United States, Rus­sia and Saudi Ara­bia are pump­ing at or near record highs, pro­duc­ing more than 33 mil­lion bar­rels per day (bpd), a third of the world’s oil.

The US sanc­tions, mean­while, are un­likely to cut sup­ply as much as ex­pected. Wash­ing­ton has granted ex­emp­tions to Iran's big­gest buy­ers, al­low­ing them to buy lim­ited amounts of oil for at least an­other six months.

China Na­tional Pe­tro­leum Corp said it was still tak­ing oil from Ira­nian fields in which it has stakes.

Wash­ing­ton has said it wants to force Ira­nian oil ex­ports down to zero, but Bern­stein En­ergy now ex­pects “Ira­nian ex­ports will aver­age 1.4 mil­lion to 1.5 mil­lion bpd” dur­ing the ex­emp­tion pe­riod, about half the vol­ume in mid-2018.

“As Opec ex­ports con­tinue to rise, in­ven­to­ries con­tinue to build, which is putting down­ward pres­sure on oil prices,” Bern­stein said. “A slow­down in the global econ­omy re­mains the key down­side risk to oil.”

The US, Rus­sia and Saudi Ara­bia are pump­ing more than 33 mn bar­rels a day

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.