Thursday, 21 February, 2019

Crude Oil Plunges As Stocks Collapse

Crude Oil Plunges As Stocks Collapse Crude Oil Plunges As Stocks Collapse
Nellie Chapman | 07 February, 2018, 08:42

US West Texas Intermediate (WTI) crude declined 66 cents to $64.79, after dropping 0.5 per cent in the previous session.

USA futures were broadly lower on Monday morning, and Asian shares fared equally weakly, with Japan's Nikkei 225 index trading down 2.44 percent as of 2:12 HK/SIN.

"This is an everything-getting-sold kind of situation", John Kilduff, founding partner at Again Capital LLC, said in a phone interview.

"This is contagious from the financial markets and the equity market, especially", Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone. While crude's strong start to the year was also helped by falling US inventories, strong gains in equities and a weaker dollar, analysts have been cautioning about the potential for a surge in USA shale production.

Brent futures, the global benchmark, were up 24 cents, or 0.3 percent, at $69.89 a barrel by 0635 GMT.

He conceded that he "potentially" might be underestimating the capability of USA shale producers to satisfy global demand to the degree that $80 oil might not happen; however, "we expect a lot of growth this year but don't find it disruptive to the overall oil price for 2018".

USA drillers last week added six rigs to raise the number of machines drilling for crude to 765, the highest since August 11, Baker Hughes data showed Friday.

Oman Crude (February delivery) fell by $2 to $65.26 per barrel on the Dubai Mercantile Exchange (DME) on Monday.

For all of 2017, Russia's total average daily crude oil production climbed to a 30-year high of 10.98 MMBPD.

United States government data last week showed output climbed above 10 million barrels per day in November for the first time since 1970.

Gasoline futures fell 0.71 cent, or 0.38%, to $1.8649 a gallon.

Iran can swiftly boost oil production if Opec decides to scrap limits on global output when the group meets next in June, Oil Minister Bijan Namdar Zanganeh said Sunday.