Posted by Unknown / Wednesday, June 15, 2016 / No comments / Latest News
TENSION AS OIL PRICE DROP FURTHER
Around 1200 GMT yesterday, Brent North Sea crude for
delivery in August was down 78 cents at $49.57 a barrel compared with Monday’s
close.
US benchmark West Texas Intermediate for July delivery
shed 72 cents to $48.16 a barrel.
After a rally in the commodity that saw WTI hit an
11-month high last week, investors are beginning to cash in and search out safe
havens such as the yen and gold.
Equities markets around the world have been tumbling
since late last week on worries about the global economy and central banks’
ability to provide support.
Those anxieties are being compounded by the real possibility
that Britain will vote to leave the European Union, with several polls putting
the pro-exit campaign in front just over a week before a referendum.
Supply-side worries have also increased, although a
Nigerian militant group has said it may commit to peace talks with Nigeria’s
government over sabotaging oil infrastructure in Africa’s biggest oil producer.
In Canada meanwhile, production which was hammered by
severe wildfires in May is expected to slowly recover as the blazes diminish.
Despite recent disruptions to output, a huge overhang in
oil stocks lingering across the world will keep a cap on any further oil price
rises, advisory group the International Energy Agency said Tuesday, even as
supply and demand move towards balance by the end of the year.
The IEA added in a monthly report that there is a “huge
number of moving parts” in the current oil market environment, making accurate
predictions hazardous.
With prices having almost doubled since hitting near
13-year low points of close to $25 at the start of the year, companies are
bringing more rigs back online as they become more economically viable.
The market previously dived from $100 a barrel in
mid-2014 because of the global supply glut.
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