Thursday , October 21 2021

Oil markets struggle to find bankruptcy after 7 percent slump


Oil markets remained weak on Wednesday after a 7% fall in the previous session, as supplies increased and demand for oil fell.

US crude oil prices in West Texas (WTI) were $ 55.66 a barrel at 0043 GMT, down 3 cents from the last settlement.

The international standards for Brent crude are not yet traded.

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Markets fell more than 7% the previous day. They have lost more than a quarter of their value since early October, making it one of the biggest declines since the price collapse in 2014.

Oil markets are on both sides: increased supplies and increased fears of an economic slowdown.

The supply wave is mainly expressed in oil production in the United States.

US crude oil output from its seven largest barrels is expected to reach a peak of 7.94 million barrels per day (bpd) in December, according to the US Department of Energy (EIA).

This wave of marine output helped the overall production of the US crude Hit a record of $ 11.6 million, making the US the largest oil producer in the world ahead of Russia and Saudi Arabia.

Most analysts expect US output to rise above $ 12 million in the first half of 2019.

"This will, in our opinion, cover any reversal above $ 85 per barrel (for oil prices)," said John Anderson, head of commodities at Vontobel Asset Management.

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The production wave in the US contributes to an increase in inventory.

US oil stocks rose 7.8 million barrels in the week ending November 2 to $ 43200 million when refiners cut output, according to US industry data.

The oil cartel of the Organization of the Petroleum Exporting Countries (OPEC), whose countries rely on high oil prices to finance government budgets, follows the concern about supply and slowdown.

Led by the top exporter of Saudi Arabia, OPEC has been making increasingly frequent public statements that it will begin to deduct oil in 2019 to tighten supply and increase prices.

"OPEC and Russia are under pressure to reduce current production levels, which is a decision we expect to receive at the next OPEC meeting on December 6," Anderson said.

That puts OPEC and Saudi Arabia on a collision course with US President Donald Trump, who publicly supports low oil prices and called on OPEC not to cut output.

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