Comprehensive  Ghana Oil and Gas news, information, updates, analysis


News in Brief

Oil prices fall

poil ghaOil prices fell in early Asian trading Friday on profit taking, following a strong rally this week that was driven by expectations that the bloated market is slowly shrinking.


Prices settled at 2016 highs overnight as traders looked past the larger-than-expected growth in U.S. crude inventories and placed their faith in declining U.S. production and intermittent output outages in some parts of the world.

Data released by the U.S. Energy Department on Wednesday showed a drop in domestic crude production for the seventh consecutive week, reducing output by 300,000 barrels since the beginning of the year.

A weaker U.S. dollar DXY, -0.36% also boosted risk-taking sentiment in commodities. As oil is traded in dollars, a weaker U.S. dollar means more affordable prices for traders holding different currencies.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in JuneCLM6, 0.48% traded at $46 a barrel, down $0.03 in the Globex electronic session. June Brent crude LCOM6, 0.29% on London’s ICE Futures exchange fell $0.03 to $47.74 a barrel.

Both WTI and Brent are likely to finish the month with gains of around 16% and 19%, respectively.

“This is a technical correction and people are looking to take profit at the end of the month. The fundamentals haven’t changed much,” said Gao Jian, a Shandong-based analyst at SCI International.

The recent uptick in Nymex crude has sent oil up 76% from a nearly 13-year low hit in February. Investors are betting that was a bottom and larger gains may follow. Their idea is that large spending cuts and a slowdown in drilling could rapidly turn the market from one with a surplus to one that is balanced, or even one with a shortage.

While a lull in production is good news for the industry, some market participants aren’t optimistic that alone could sustain the rally.

“It is worth keeping in mind that it is possible for U.S. oil production declines to slow without a recovery in the rig count due to the very large number of drilled uncompleted wells,” analysts at Societe Generale said in a note.

Drilled uncompleted wells are wells that could be completed and begin operation in a month, which means U.S. shale producers can quickly ramp up production and drench the market with extra barrels when prices improve. There could be as many as 3,500 to 4,000 of these wells, the bank said.

“This would have the potential to slow the ongoing decline in U.S. oil production and push the WTI front-month price back down to about $40 where there would be little producer interest to put on price hedges,” the bank added.

Nymex reformulated gasoline blendstock for May RBK6, -0.13% — the benchmark gasoline contract — fell 116 points to $1.5864 a gallon, while May diesel traded at $1.4066, 20 points higher.

ICE gasoil for May changed hands at $417.00 a metric ton, up $1.75 from Thursday’s settlement.

Source: http://classfmonline.com/1.9004335

Profile photo of Editor
Follow Us

Editor

Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
Profile photo of Editor
Follow Us

Share this article

Leave a reply

Personality of the Month
  • Prof. Thomas Mba Akabzaa Chief Director of Ministry of Petroleum          …
Follow Us Online
Join the Discussions

Summary: Revenue mobilization from the oil sector for Agricultural production in Ghana, a myth or reality?

Agriculture, once considered the backbone of Ghana’s economy recorded a reduction of its contribution to GDP from 45% in 1992…

Responses Add your response


About Us
Reporting Oil and Gas project was launched on 4th June 2009 at Takoradi, Western Region, Ghana by Penplusbytes (www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector read more
Events Calendar
<< Aug 2017 >>
MTWTFSS
31 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31 1 2 3
Twitter Activity Stream
 

Partners We are proud to be associated with:

Skip to toolbar