Oil drops as traders assess the prospect of Opec output boost
Futures in New York fell 0.4% after a 0.3% drop Friday
Oil dropped near $65 (Dh239) as the prospect of rising output in the US weighed on prices while investors continued to assess signs from Opec on whether it would ease production curbs.
Futures in New York fell 0.4 per cent after a 0.3 per cent drop Friday. The number of rigs drilling for crude in the US inched higher, signalling output may rise from record levels. Russia, which along with Saudi Arabia is trying to assemble support for lifting Opec and allies’ output limits, is said to have boosted crude production earlier this month to above the level envisioned by the group.
Oil has fallen to near the lowest level in two months after Saudi Arabia and Russia signalled they are ready to restore production in the second half of this year to offset potential supply disruptions in Iran and Venezuela. The latest sign of Russia’s willingness to relax caps is in contrast with some fellow producers including Iran, Venezuela and Iraq, which have signalled they are against restoring output ahead of the group’s key meeting in Vienna later this month.
“Investors are taking a waitand-see stance until the Opec meeting,” Jun Inoue, a senior economist at Mizuho Research Institute Ltd., said by phone from Tokyo. Meanwhile, “growing production in the US is helping to create concerns of a surplus and will likely continue to
DME Oman Crude —
Spot Gold ■
US drilling rig count currently which rose by 1 last week
weigh on West Texas Intermediate prices.”
WTI for July delivery fell 27 cents to $65.47 a barrel on the New York Mercantile Exchange at 4:03pm in Tokyo. Prices dropped 0.1 per cent last week, to cap a third weekly decline. Total volume traded was about 37 per cent below the 100-day average.
Brent futures for August
Brent futures for August settlement slumped 44 cents to $76.02 on London’s ICE Futures Europe exchange. The contract dropped 0.4 per cent last week. +0.01%
UAE 24 ct Gold/10g –0.32% The global benchmark traded at a $10.62 premium to WTI for August. Futures dropped 0.2 per cent to 467.5 yuan per barrel on the Shanghai International Energy Exchange. The contract fell 1.4 per cent last week.
The US government has quietly asked Saudi Arabia and some other producers in Opec to increase oil production by about 1 million barrels a day, according to people familiar with the matter. In the US, drilling rigs targeting oil rose by 1 to 862 last week, the highest since March 2015, according to Baker Hughes data.
slump in Brent futures for August settlement
UAE 22 ct Gold/10g –0.34%