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Page added on November 29, 2018

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Oil Falls Below $50 for First Time in Over a Year

Production

Oil crashed below $50 a barrel for the first time in more than a year as Russia signaled little urgency to commit to supply cuts, while U.S. crude stockpiles continue to grow.

Futures tumbled as much as 1.8 percent in New York, after sliding 2.6 percent in the previous two sessions. Just days before talks on oil policy with Saudi Arabia, Russian President Vladimir Putin said current prices are “absolutely fine”, while Saudi energy minister said the kingdom is confident OPEC and its partners can reach a deal to stabilize the market. U.S. crude inventories rose for a 10th week, government data show.

Crude has crashed into a bear market after America’s surprise sanctions waivers for Iranian oil fueled concern over a supply glut. As prices plunged, traders’ focus turned to G20 summit this week in Argentina where Russian leader and Saudi crown prince are expected to discuss production. The market is flirting with expectations that the Organization of Petroleum Exporting Countries and allied producers may agree on output curbs at their gathering next week in Vienna.

“Putin’s comments raised speculation that Russia may not join its fellow producers in curbing production,” Sungchil Will Yun, Seoul-based commodity analyst at HI Investment & Futures, said by phone. “At the same time, we have expanding American crude stockpiles and they are unlikely to shrink in the near future.”

West Texas Intermediate for January delivery fell as low as $49.41 a barrel on the New York Mercantile Exchange, the least since Oct. 9, 2017. The contract declined 2.5 percent to settle at $50.29 on Wednesday, the lowest close since October 2017. Total volume traded was 84 percent above the 100-day average.

Brent for January settlement, which expires Friday, fell as much as 2.1 percent to $57.50 a barrel on London’s ICE Futures Europe exchange. The global benchmark traded at an $8.26 premium to WTI. The more-active February contract lost 1.3 percent.

While Putin praised Saudi Crown Prince Mohammed Bin Salman and said Moscow is ready to cooperate further, he said crude around $60 a barrel is “balanced and fair” and well above the level needed to keep his government’s budget in surplus.

In the U.S., nationwide crude stockpiles rose by 3.58 million barrels last week in their longest such weekly streak since November 2015, according to the Energy information Administration. That’s more than the 1-million-barrel gain predicted in a Bloomberg survey, overshadowing a surprise draw in gasoline inventories.

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2 Comments on "Oil Falls Below $50 for First Time in Over a Year"

  1. joe on Fri, 30th Nov 2018 9:56 am 

    A couple of months ago murdering prince Salman was hoping to ramp up the price, I guess khashoggi has had some benefits. Russia is doing what Russia does, pump, pump pump, Russia (like Iran) has a couple of irons in the fire, not many, but enough to keep the wolf from the door. Trump publicly berated the FED chairman for suggesting that rates could go up. The next day the FED chairman states that rates are at or near ‘neutral’. Oh boy, we are a long way from Alan Greenspan now. Why this matters is because the low rates are fueling a credit bubble within the banking system itself. This money is not leaking into higher wages, job growth is good but gdp steady. So where’s all that credit going? Well if you think it out the money has been sunk more or less into the pockets of the wealthy and is being held as cash and literally being hidden away in all the little tax havens which is why the stock markets are reacting so often to even the slightest hint that the party might be over. 500 point swings should be thought of as normal. But nothing has been really ‘normal’ in the US since the third way liberals and neocons took power in the 1990s.

  2. FUCK CNN on Fri, 30th Nov 2018 10:36 am 

    TRUMP 2020.

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