By Srinivas Chowdary Sunkara // petrobazaar // 29th April, 2019.
Brent prices shrank $2.2 to $72.15 and WTI futures lost $1.91 to $63.3 on Friday. Shanghai crude oil main contract closed 0.52% down at 498 Yuan/barrel while MCX crude futures settled Rs.158 lower at Rs.4409 on Friday. Both the global benchmark futures lost around 3% after the Trump call to OPEC to increase production which became a catalyst to to book profits on the week end.
Today, Oil prices extended slump from Friday as the market shifted its focus from OPEC + cuts to spare capacity. Oil markets also reassessed the impact of U.S sanctions on Iran, Assuming that the Tehran may maintain some degree of exports and China will continue to import Iran oil. Another fundamental reason behind the bearish trend would be the 'spare capacity' which is in spotlight. The enough spare capacity of around 3Mb/d is available with OPEC cartel to compensate 1Mb/d of missing Iran barrels. Saudi and UAE apparently willing to offset the Iranian disruptions. Turning to weekly data, Baker Hughes reported a biggest weekly decline of 20 oil rigs in U.S which provided some support to oil prices. Have a good day.
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