- Nineteen prisoners use cutlery to break out of cells at Winchester prison
- France wants progress in Ukraine before Russia returns to G7
- Italy president begins talks to seek way out of government crisis
- Italian PM expected to resign as political chaos deepens
- Russia says US cruise missile test ‘regrettable’
- Kremlin - No date set for Normandy talks on Ukraine despite Macron meeting
- Egypt court hands out 6 death sentences on terror charges
- Putin says Russian nuclear explosion poses no threat
- Russian panel eyes alleged foreign interference in protests
- Gran Canaria wildfire triggers evacuation of thousands of people
- PM Johnson calls on Germany and France to compromise on Brexit
- Sudan's ex-president Bashir arrives at corruption trial
TEHRAN, February 6- Oil prices dropped by 1 percent on Tuesday, extending falls from the previous session as global financial markets headed south in the wake of one of the biggest intra-day falls ever registered on Wall Street.
TEHRAN, Young Journalists Club (YJC) -Oil prices dropped by 1 percent on Tuesday, extending falls from the previous session as global financial markets headed south in the wake of one of the biggest intra-day falls ever registered on Wall Street.
Brent crude oil futures LCOc1 were at $66.93 per barrel at 0352 GMT, down 69 cents, or 1 percent, from the previous close. That was more than $4 below their high-point for 2018, hit last month.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $63.45 a barrel, down 70 cents, or 1.1 percent, from their last settlement and more than $3 off their 2018-high.
Financial markets went into a tailspin on Monday when U.S. stocks plunged in highly volatile trading which saw the Dow Jones Industrial Average .DJI tumble by almost 1,600 points in intra-day trading, its biggest ever point-to-point loss within one trading session, as investors grappled with rising bond yields and potentially firming inflation.
U.S. S&P 500 futures ESc1 tumbled 2.5 percent to 4-month lows in Asian trade on Tuesday, as the sell-off triggered by worries about inflation showed no sign of abating.
“Suddenly, inflation has become one of the most-talked about issues in markets,” U.S. bank J.P. Morgan said in a note to clients.
However, the correction in oil is more than a reaction to the sell-off in financial markets.
Despite efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to withhold production since January last year in order to tighten the market and prop up prices, crude supplies remain relatively ample.
That’s largely due to soaring U.S. oil production C-OUT-T-EIA, which has jumped by almost 18 percent since mid-2016 to 10 million barrels per day (bpd) - surpassing output by leading exporter Saudi Arabia.
Only Russia produces more, averaging 10.98 million bpd in 2017.
What’s more, there are indications that U.S. oil output will rise further: the amount of rigs drilling for oil fields rose to 765 by late January, easily more than double the 316 that were in operation during 2016’s production lull.
There is also a seasonal downturn to demand, as many refineries shut for maintenance following the upcoming end to the peak-consumption winter heating season in the northern hemisphere.
The largest U.S. refinery, Motiva Enterprises’ 603,000 bpd Port Arthur facility in Texas, began a planned one-month overhaul on Monday of its key crude oil processing unit.
Consequently, hedge fund managers have cut their bullish exposure to petroleum for the first time in six weeks.
Source: Reuters
Your Comment