By Srinivas Chowdary Sunkara // petrobazaar // 13th January 2020.
Brent oil futures lost 39 cents to $64.98 and WTI oil futures plummeted 52 cents to $59.04 a barrel on Friday. In Shanghai, crude oil main contract futures prices dropped by 13.3 Yuan or 2.7% at 479.1 Yuan/barrel while MCX crude futures settled down Rs.35 at Rs.4202 on late week. Brent futures traded at a premium of $5.94 over WTI futures during the session.
The world benchmark crude futures indexes moved down on Friday, posted a first weekly loss since late November, Erasing the week's risk premium that was added since the U.S drone attacks on Iran. The way the market gives geopolitical risk premium and then takes back during the week indicates that the oil markets are not fundamentally supported and the market participants are thinking that there is a lot of oil around the world that consumption doesn't take care of. On the other hand, Traders shifted focus from geo-politics to weekly numbers which broadly supported oil prices.
Turning to rig numbers, US rig count continued to fall. U.S drillers dropped 11 oil rigs and 4 gas rigs from drilling activity during the last week. In contrast, U.S oil production continued to increase and very likely to see 13Mbpd very soon since the drop in rig numbers will not affect the oil production immediately and will take couple of months to see the decline in production. Today morning, Asian markets are opened in red continuing last week losses. Good day to all.
Disclaimer: Views and opinions expressed here are personal. This commentary is for information purposes only and not an offer or a solicitation to sell or buy any physical commodities or financial instruments. The views and analysis are based on reliable public information available at the time of writing. This report and its content cannot be copied, redistributed or reproduced in part or whole without the prior written permission of petrobazaar.com