Related: Why It Isn’t Game Over For Canada’s Oil SandsThe other negative weighing on oil prices is the increase in U.S. crude oil production.
Turning PointAlthough yesterday’s price plunge may have been an over-reaction, it may also represent a turning point for prices to adjust downward.
In short, this would more than cancel the U.S. decline since oil prices collapsed in late 2014.
Source: EIA March 2017 STEO and Labyrinth Consulting Services, Inc.Over-Reaction or Turning Point?
Comparative inventory–the crucial price indicator-only moved up 2.4 mmb (Figure 3).
as informed in
Oil Price Plunge Is An Overreaction, But It May Also Be A Turning Point
In part, the price slump reflects a growing realization that the OPEC production cut is unlikely to quickly resolve the problem of outsized global oil inventories.
The official narrative was that a larger-than-expected 8.2 million barrel (mmb) addition to U.S. crude oil inventories pushed prices lower.
That explanation is not consistent with larger recent additions to storage that had little effect on oil prices.
Oil prices plunged Wednesday.
Comparative inventory–the crucial price indicator–only moved up 2.4 mmb (Figure 3).
as informed in
Markets have been in a cautious mood all week amid expectations the U.S. Federal Reserve will raise interest rates next Wednesday.
Early today, the European Central Bank left interest rates and its quantitative easing programme unchanged despite some calls for tightening monetary policy.
Bargain hunters found value in the oil patch after Shell divested its oil sands to Canadian Natural Resources, but lingering weakness in the gold and financial sectors prevented a rally in the broader market.
In corporate news, Canadian Natural Resources (CNQ.TO) will pay $8.5 billion to Royal Dutch Shell in cash and stock for 60 percent of its Athabasca Oil Sands.
Traders paid close attention to oil prices, as WTI crude oil slipped to fresh 2017 lows.
collected by :Jack Alex