✂ Fed’s first rate cut since 2020: Use our free Stock Screener to find new opportunities fastExplore for FREE

Oil prices fall on persistent fuel supply overhang

Published 11/11/2016, 12:27 pm
Updated 11/11/2016, 12:30 pm
© Reuters. Oil prices fall on persistent fuel supply overhang
LCO
-
CL
-
DXY
-

* IEA expects glut to last far into 2017 unless OPEC cuts output

* Stronger dollar also weighs on oil prices

By Henning Gloystein

SINGAPORE, Nov 11 (Reuters) - Oil prices fell in early trading on Friday, as the market refocused on a persistent fuel supply overhang that is not expected to abate unless OPEC and other producers make a significant cut to their output.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $44.40 per barrel at 0120 GMT, down 26 cents, or 0.6 percent, from their last settlement, with a stronger dollar also weighing on prices.

International Brent crude oil futures LCOc1 were down 17 cents, or 0.4 percent, at $45.67 a barrel.

Traders said that an ongoing crude and refined product supply overhang that has dogged markets for over two years was weighing on markets.

"Crude oil prices fell as the focus returned to supply growth. The IEA suggested prices may continue to retreat amid relentless supply growth unless OPEC makes significant supply cuts," ANZ bank said on Friday.

The supply overhang could run into a third year in 2017 without an output cut from the Organization of the Petroleum Exporting Countries (OPEC), while escalating production from other exporters could lead to relentless supply growth, the International Energy Agency said on Thursday. its monthly oil market report, the group said global supply rose by 800,000 barrels per day (bpd) in October to 97.8 million bpd, led by record OPEC output and rising production from non-OPEC members such as Russia, Brazil, Canada and Kazakhstan.

The IEA kept its demand growth forecast for 2016 at 1.2 million bpd and expects consumption to increase at the same pace next year, having gradually slowed from a five-year peak of 1.8 million bpd in 2015.

Beyond oversupply, a surging dollar .DXY following the initial shock of Donald Trump's U.S. presidential election win also put pressure on prices, traders said.

Because oil and refined products are traded in dollars, its import costs rise for any country using other currencies at home, potentially crimping demand.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.