Oversupply risks weigh on Oil
20/01/2015 09:28
Crude oil futures plunged in the domestic market on Monday as investors and speculators exited positions in the energy commodity tracking a bearish trend in the overseas market as Iraq’s production rose to record highs, threatening to boost a supply glut.
Iraqi Oil Minister said that the second biggest crude producer in the OPEC is pumping oil at a record pace of 4 million barrels per day. Further, Iran’s Oil Minister said that the country may withstand a deeper fall in prices even as low as USD 25 per barrel.
The US, the world’s biggest crude consumer, signaled that it won’t intervene in the global oil market to arrest a decline, allowing market forces to decide prices, the State Department’s energy envoy said. The US has made its intention clear that it will not cut production despite falling oil prices, against expectations by some OPEC members of high-cost US shale producers being the first to cut output as the crude crash threatens to squeeze margins.
Sentiment also weakened after a top US Federal Reserve official signaled headwinds to the world’s biggest economy amid global weakness, dimming the demand outlook for the fuel. Federal Reserve Bank of San Francisco President John Williams warned that global risks including a Japan recession, Europe stagnation and China slowdown threatened to cut growth in US economy which is seen expanding by 2.5-3 per cent this year.
Oil may extend a downward slide amid fears of a widening surplus.
At the MCX, Crude oil futures, for the February 2015 contract, closed at Rs 2,983 per barrel, down by 1.26 per cent, after opening at Rs 3,037, against the previous close price of Rs 3,021. It touched an intraday low of Rs 2,973 till the closing
20/01/2015 09:28
Crude oil futures plunged in the domestic market on Monday as investors and speculators exited positions in the energy commodity tracking a bearish trend in the overseas market as Iraq’s production rose to record highs, threatening to boost a supply glut.
Iraqi Oil Minister said that the second biggest crude producer in the OPEC is pumping oil at a record pace of 4 million barrels per day. Further, Iran’s Oil Minister said that the country may withstand a deeper fall in prices even as low as USD 25 per barrel.
The US, the world’s biggest crude consumer, signaled that it won’t intervene in the global oil market to arrest a decline, allowing market forces to decide prices, the State Department’s energy envoy said. The US has made its intention clear that it will not cut production despite falling oil prices, against expectations by some OPEC members of high-cost US shale producers being the first to cut output as the crude crash threatens to squeeze margins.
Sentiment also weakened after a top US Federal Reserve official signaled headwinds to the world’s biggest economy amid global weakness, dimming the demand outlook for the fuel. Federal Reserve Bank of San Francisco President John Williams warned that global risks including a Japan recession, Europe stagnation and China slowdown threatened to cut growth in US economy which is seen expanding by 2.5-3 per cent this year.
Oil may extend a downward slide amid fears of a widening surplus.
At the MCX, Crude oil futures, for the February 2015 contract, closed at Rs 2,983 per barrel, down by 1.26 per cent, after opening at Rs 3,037, against the previous close price of Rs 3,021. It touched an intraday low of Rs 2,973 till the closing
