All the lat­est top sto­ries from Europe and the Mid­dle East

EME Outlook - - Contents -

Oil prices slipped re­cently as Wall Street slid more than one per­cent and en­ergy mar­ket in­vestors re­mained wary of grow­ing crude sup­ply, although ten­sions be­tween Saudi Ara­bia and Iran gave prices some sup­port.

Brent crude fu­tures dropped 16 cents, or 0.2 per­cent, to set­tle at $66.05 a bar­rel. US West Texas In­ter­me­di­ate (WTI) fu­tures fell 28 cents, or 0.5 per­cent, to end at $62.06 a bar­rel.

“The eq­uity mar­kets are cer­tainly a driv­ing fac­tor be­hind this slide to­day,” said Brian Larose, Tech­ni­cal An­a­lyst at United-icap in Jersey City. “Since the open, they have been hit pretty hard,” he said.

Wall Street’s main in­dexes fell more than 1.5 per­cent as in­vestors wor­ried about a po­ten­tial trade war and as Face­book shares dragged down the tech sec­tor. Oil prices have been in­creas­ingly mov­ing in tan­dem with eq­ui­ties.

Strong de­mand, how­ever, pre­vented oil from slid­ing fur­ther, said Phil Flynn, an­a­lyst at Price Fu­tures Group in Chicago. “We keep talk­ing about all this shale oil pro­duc­tion, but it’s not re­ally show­ing up that much in global in­ven­to­ries; they con­tinue to be tight,” Flynn said.

Still, last week’s rise in the US rig count re­mains a po­ten­tial head­wind for oil bulls. US drillers added four oil rigs last week, bring­ing the to­tal count to 800, Baker Hughes said.

“At the cur­rent oil price level, drilling

- and thus out­put - in the US is likely to in­crease fur­ther,” an­a­lysts at Com­merzbank said in a note.

US crude oil pro­duc­tion has risen more than a fifth since mid-2016, to 10.38 mil­lion bar­rels a day (bpd).

Prices also climbed on Fri­day af­ter Saudi Crown Prince Mo­hammed bin Sal­man said the King­dom would de­velop nu­clear weapons if arch-ri­val Iran did.

“This week there will be... a pric­ing of some geopo­lit­i­cal risk with the crown prince go­ing on a visit to the United States which is likely to pro­vide a lot of head­lines against Iran and the (sanc­tions) deal,” Petro­ma­trix an­a­lyst Olivier Jakob said, re­fer­ring to Iran’s pact that has re­moved sanc­tions on that coun­try in re­turn for lim­its on its nu­clear pro­gramme.

Pres­i­dent Don­ald Trump has crit­i­cised the deal fre­quently, rais­ing the pos­si­bil­ity that the United States could stop its sanc­tions re­lief.

Britain, France and Ger­many have pro­posed fresh Euro­pean Union sanc­tions on Iran over its bal­lis­tic mis­siles pro­gramme and its role in Syria’s war.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.