What’s next? – OIL 06.12.17

Wed, Dec 6 2017, 08:21 GMT

by Fort Financial Services

Oil futures were lower in Asian trading hours on Wednesday, with market players digesting inventory estimates and preparing for official data later in the day.

 

The US West Texas Intermediate crude contracts were down 0.38 percent to $57.40 per barrel as of 06:05 GMT. Meanwhile, Brent futures down 0.37 percent to $62.63 a barrel.

 

Crude benchmarks were mixed on Tuesday as support from the OPEC-led output cuts agreement extension eased and concerns over rising US shale oil production weighed.

 

Overnight, the American Petroleum Institute said crude inventories dropped by 5.481 million barrels last week, above an estimated decline of 4.1 million barrels.

 

Ahead in today’s session, investors will be focusing on the release of crude and refined products stockpiles figures by the US Energy Information Administration.

 

Last week, oilfield services provider Baker Hughes reported a raise in the total oil rig count to 749 units, the highest level since September.

 

According to recent EIA data, shale oil production in the US has grown nearly 15 percent since a bottom in mid-16 and increasing rigs preview even further advances.

 

Investors doubt that OPEC and its allies will be able to counteract increasing US production and continue to support prices. Last week, output cuts were extended for nine-months until the end of 2018, although the target reduction remained at 1.8 million barrels a day (bpd).

Published on Wed, Dec 6 2017, 08:21 GMT

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