Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Oil prices drop to 1-week lows as glut concerns linger

Published 03/24/2016, 04:52 AM
© Reuters.  Oil prices drop to 1-week lows
LCO
-
CL
-

Investing.com - Oil prices extended losses from the previous day in European trade on Thursday, with the U.S. benchmark slumping to a one-week low after data showed that domestic oil supplies rose to an all-time high last week.

Crude oil for May delivery on the New York Mercantile Exchange shed 49 cents, or 1.23%, to trade at $39.30 a barrel by 08:50GMT, or 4:50AM ET, after hitting a daily low of $39.17, the weakest level since March 16.

A day earlier, Nymex prices plunged $1.66, or 4.0%, in the wake of disappointing supply data.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by a more-than-expected 9.4 million barrels last week to an all-time high of 532.5 million barrels, underlining concerns over a domestic supply glut.

Since falling to 13-year lows at $26.05 on February 11, U.S. crude futures have rebounded by approximately 45% as a decline in U.S. shale production boosted sentiment. However, analysts warned that market conditions remained weak due to an ongoing glut.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for May delivery declined 31 cents, or 0.77%, to trade at one-week lows of $40.16 a barrel. On Wednesday, London-traded Brent futures tumbled $1.32, or 3.16%.

Producers from the Organization of the Petroleum Exporting Countries and non-members are due to meet on April 17 in Qatar discuss the output freeze. But it isn’t clear exactly which, or how many, OPEC and non-OPEC members will attend the meeting.

Brent futures are up by roughly 45%, since briefly dropping below $30 a barrel on February 11. Short-covering began in mid-February after Saudi Arabia and fellow OPEC members Qatar and Venezuela agreed with non-OPEC member Russia to freeze output at January levels, provided other oil exporters joined in.

Meanwhile, Brent's premium to the WTI crude contract stood at 86 cents a barrel, compared to a gap of 68 cents by close of trade on Wednesday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.