..In the cards…
(Bloomberg) — Oil held losses below $62 a barrel on
concerns that it may be facing a double whammy of rebounding
American stockpiles and booming U.S. production.
Futures were little changed, after dropping 1.1 percent on
Monday. The U.S. government expects major shale regions to boost
output by 131,000 barrels a day in April, spurring fears that
surging supplies will undermine OPEC’s efforts to clear a glut.
Sentiment is being soured further as U.S. inventories are
forecast to have risen for a third week.
Oil has struggled to recover losses from last month’s
broader market slump after climbing over $66 a barrel in
January. While there’s renewed confidence over demand on a
brighter economic outlook following a better-than-expected jobs
report in the U.S., expanding American production continues to
remain a challenge to the Organization of Petroleum Exporting
Countries and its allies including Russia that are trying to
prop up prices via output curbs.
“Currently, there’s downward pressure on oil prices with
concerns remaining over surging U.S. crude production,” Kim
Kwangrae, a commodities analyst at Samsung Futures Inc., said by
phone in Seoul. “Increasing output alone is a problem but, at
the same time, we have American stockpiles rebounding, which may
continue to challenge crude from recovering.”
West Texas Intermediate for April delivery traded at $61.24
a barrel on the New York Mercantile Exchange, down 12 cents at
4:39 p.m. in Seoul. The contract declined 68 cents to $61.36 on
Monday. Total volume traded was about 53 percent below the 100-
Brent for May settlement slipped 9 cents to $64.86 a barrel
on the London-based ICE Futures Europe exchange. The contract
dropped 54 cents, or 0.8 percent, to $64.95 on Monday. The
global benchmark traded at a $3.65 premium to May WTI.
See also: U.S. Oil Export Surge Means OPEC’s Output Cuts
May Be Doomed
Production from shale regions will reach 6.95 million
barrels a day next month, the U.S. Energy Information
Administration said in its monthly drilling productivity report.
The Permian Basin is seen leading the way with an 80,000-barrel
increase. Total American output has passed 10 million barrels a
day, beating a record set in 1970.
U.S. crude inventories probably expanded by 1.9 million
barrels in the week through March 9, according to a Bloomberg
survey before Energy Information Administration data on
Wednesday. Meanwhile, stockpiles at Cushing, Oklahoma, the
delivery point for WTI futures, are forecast to have been little
changed after 11 straight weeks of declines.
* Workers at Libya’s Zawiya oil export terminal started a strike
on Monday over delayed salary payments, according to people with
knowledge of the matter, who asked not to be identified because
they are not authorized to speak to media.
* Gasoline futures in New York are down 0.2 percent at $1.8894 a