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Oil slips back toward 18-month lows on oversupply by

© Reuters. FILE PHOTO: A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport

Oil prices fell on Thursday after rebounding 8 percent in the previous session, as worries over a glut in crude supply and concerns over a faltering global economy pressured prices even as a stock market rally offered support.

Brent crude oil fell $1.67 a barrel, or 3.1 percent, to a low of $52.80 before recovering to around $53.30. U.S. light crude oil dropped $1.30 to $44.92 and was last 90 cents lower at $45.32.

Oil prices reached multi-year highs in early October but are now approaching their lowest levels for 18 months.

Both crude oil benchmarks have lost more than a third of their value since the beginning of October and are heading for losses of more than 20 percent in 2018.

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“Fear of a bear market remains in place,” said Johannes Gross at Vienna-based consultancy JBC Energy.

Three months ago it looked as if the global oil market would be under-supplied through the northern hemisphere winter as U.S. sanctions removed large volumes of Iranian crude.

But other oil exporters have more than compensated for any shortfall, filling global inventories and depressing prices.

The fuel glut has combined with faltering investor sentiment in other asset classes, producing a bear market for oil.

Stock markets rebounded on Wednesday after U.S. President Donald Trump’s administration attempted to shore up investor confidence.

The Organization of the Petroleum Exporting Countries met earlier this month with other producers including Russia and agreed to reduce output by 1.2 million barrels per day (bpd), equivalent to more than 1 percent of global consumption.

But the cuts won’t take effect until next month and oil production has been at or near record highs in the United States, Russia and Saudi Arabia, with the U.S. pumping 11.6 million bpd of crude, more than both Saudi Arabia and Russia.

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