Oil eased toward $66 a barrel on Monday after reaching a 2015 high, as ample current supplies and weak Chinese factory activity countered expectations of a tighter supply and demand balance later this year.
The collapse of oil prices in 2014 has prompted expectations that supply growth in higher-cost crude producers such as the United States will slow. On Friday, oil services firm Baker Hughes Inc. said the number of U.S. active rigs had fallen for a record 21 weeks in a row.
Brent crude LCOc1 slipped 15 cents to $66.31 a barrel by 09:31 a.m. EDT, after hitting a 2015 peak of $67.10. U.S. crude CLc1 lost 23 cents to $58.92. The U.S. benchmark hit its highest this year at $59.90 on May 1.
“The market is expecting the tightening in the second half of the year,” said Eugen Weinberg, analyst at Commerzbank.
“We argue this dynamic is hardly fundamentally sound,” he said of the market’s rally. “There has yet to be any noticeable drop in U.S. oil production.”
A public holiday in Britain on Monday limited trading volume.
via Reuters
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Latest posts by Alfonso Esparza (see all)
- Market Rally Still Going Low Holiday Volumes Awaiting Start of 2020 - 27 December 2019
- Market Awaits China Retaliation on Trade - 29 November 2019
- Alibaba to Close Order Book Ahead of Huge IPO - 18 November 2019