By Srinivas Chowdary Sunkara // petrobazaar // 28th May, 2018.
Oil prices dropped
Crude oil prices have fallen from early May peak levels. We have just crossed a bearish week, left both the futures in weekly loss of 2.61% for Brent and 4.78% for WTI respectively. Today Asian Markets are opened down with a remarkable large gap from previous close. Rise in U.S rig number weighed on oil prices.
Fundamentally Oil prices have fallen on emerged reports that the top producers Saudi and Russia agreed to increase the production by 1Mbpd in the 2H18. Increasing U.S production is adding to the fuel. Russians found that $60 per barrel is the ideal price for both the supplier and consumer amid Asian top importers India and China expressed concern over the high oil prices. Iran is expected to pump maximum oil into market before commencement of sanctions.
Crude oil price update
U.S crude oil futures, WTI for July delivery closed down at $67.88 a barrel with a loss of $2.83 on NYMEX while Brent futures to be delivered in July dropped by $2.35 per barrel on London based ICE futures Europe exchange. Both the futures are opened down today during Asian trade and WTI is trading with a discount of around $9 at the time of reporting.
Rig Count – Summary
U.S drillers planted an additional 15 oil rigs across the country this week. The number of oil rigs rose to 859 this week, bringing the total rig count up to 1059. Gas rigs declined by two to 198. The Permian Basin in West Texas increase by 11 followed by Barnett Shale in North Texas.
Comment
The De-facto leaders of the OPEC and non-OPEC countries have not entered into formal agreement to increase production. U.S is pumping more oil into market to meet growing demand. I strongly feel that long positions are taking profits due to which markets took U turn. let us see what will happen.
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