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2 Feb 2016
Oil drops further on rising OPEC supply, API report eyed
FXStreet (Mumbai) - Oil benchmarks on both sides of Atlantic extends losses for the second straight session on Tuesday, as markets remain wary over the Chinese growth prospects as well as amid rising supply from the cartel.
Oil at four-day lows
Currently, WTI drops -1.80% to 31.05, while the Brent oil falls -1.48% to 33.74. The crude futures on Nymex extended the previous 6% slump as the recent weak global manufacturing surveys, particularly China’s, continue to weigh on the demand prospects for oil from the world’s second largest oil consumer.
Moreover, rising supplies from OPEC added to the bearish sentiment around oil. Analysts at ANZ noted, "Rising supply also suggests further downside risk to short-term prices. Output from OPEC rose to 33.1 million barrels per day last month as Indonesia's membership to the group was reactivated."
Further, Goldman Sachs comments that OPEC is unlikely to cut production also weighs on investors’ minds and pushes the prices lower. However, talks of a possible meeting between OPEC and non-OPEC producers may keep the downside restricted somewhat.
Attention now turns towards a host of key macro releases from the US, while the weekly crude stockpiles reports from both API and EIA will be closely watched for fresh cues on the black gold.
Oil at four-day lows
Currently, WTI drops -1.80% to 31.05, while the Brent oil falls -1.48% to 33.74. The crude futures on Nymex extended the previous 6% slump as the recent weak global manufacturing surveys, particularly China’s, continue to weigh on the demand prospects for oil from the world’s second largest oil consumer.
Moreover, rising supplies from OPEC added to the bearish sentiment around oil. Analysts at ANZ noted, "Rising supply also suggests further downside risk to short-term prices. Output from OPEC rose to 33.1 million barrels per day last month as Indonesia's membership to the group was reactivated."
Further, Goldman Sachs comments that OPEC is unlikely to cut production also weighs on investors’ minds and pushes the prices lower. However, talks of a possible meeting between OPEC and non-OPEC producers may keep the downside restricted somewhat.
Attention now turns towards a host of key macro releases from the US, while the weekly crude stockpiles reports from both API and EIA will be closely watched for fresh cues on the black gold.