US Oil Prices see Further Drop
Published By : 07 Jul 2015 | Published By : QYRESEARCH
US prices of oil dropped to a near three-month low on Tuesday amid concerns regarding an increasing glut of crude oil.
Sweet, light crude meant for delivery in august dropped 0.4 per cent or 20 cents to reach US$ 52.33 per barrel on the New York Mercantile Exchange. This has been the lowest settlement since April 13.
The global benchmark Brent spiked 0.5 per cent or 31 cents to reach US$ 56.85 per barrel on the ICE Futures Europe after dropping to US$ 55.10 per barrel in the session.
Oil prices on Monday posted their highest drop since February amid concerns regarding a persistent oversupply of crude. Output from the Organization of the Petroleum Exporting Countries and the United States has risen over the past recent months, taking those investors by surprise who were expecting production to drop as low as the oil prices. This in turn prompted producers to cut their spending on new production. Even though the demand has increased sharply, a few market experts state that consumption will not be sufficient enough to gnaw away at the worldwide glut of crude oil until next year.
The United States Energy Information Administration on Tuesday said that the production of crude in the US declined from a 44 year-long high in May and that this is anticipated to continue falling through February next year. Be that as it may, the Energy Information Administration expects that the global supplies will surpass consumption both this year and the following one.
Recent data has shown concerns about the Greece crisis, higher than anticipated oil supplies, and the unsettling stock market in China. This has prompted a few traders to recede from bullish bets on crude oil. Money managers and hedge funds slashed their aggregate bet on increasing prices of oil to the smallest since the month of April in the week that drew to a close on June 30.