Close  

Oil prices hold steady on lower US supplies

/ 12:15 PM June 03, 2016
OPEC at Crossroads

AP FILE PHOTO

SINGAPORE, Singapore—Oil prices held steady in Asian trading on Friday after a fall in US crude inventories offset OPEC’s decision to shun production caps.

The commodity initially fell on Thursday after the Organization of the Petroleum Exporting Countries ended its meeting in Vienna with no agreement, as expected, to lower or cap output despite a global supply glut.

ADVERTISEMENT

However, it rebounded after a US Department of Energy report showed commercial crude inventories sank by 1.4 million barrels last week, indicating a pick-up in demand in the world’s top crude consumer.

At about 0230 GMT, US benchmark West Texas Intermediate for delivery in July was two cents up at $49.19 a barrel while Brent for August was four cents higher at $50.08.

FEATURED STORIES

A final statement from OPEC said that since its December meeting “crude oil prices have risen by more than 80 percent, supply and demand is converging and oil and producer stock levels in the OECD (industrial economies) have recently shown moderation.”

It added: “This is testament to the fact that the market is moving through the balancing process.”

IG Markets analyst Bernard Aw told AFP that OPEC’s failure to agree a new ceiling had been priced in by the market.

“The OPEC meeting was of not much surprise and was a non-event,” he said.

“For now prices are still sideways and still have that big $50 hurdle to clear.”

Traditionally OPEC, which pumps around a third of the world’s oil, has cut production to boost prices.

But in the most recent prolonged drop, tumbling from more than $100 in mid-2014 to close to $25 in January, OPEC—driven by Saudi Arabia—has changed tack, keeping oil flowing to maintain market share and squeeze competitors.

ADVERTISEMENT

Aw said a continued fall in US inventories, coupled with rising demand from China and India, could lead to a “fundamental change in supply and demand.”

“The report shows that the US production and stockpiling is on the decline. That helps to ease the oversupply issue and is positive for oil prices,” he added.

Crude prices briefly topped $50 last week for the first time this year as short-term production disruptions in Canada and Nigeria eased concerns about global supplies.

RELATED STORIES

Oil prices flat ahead of OPEC meeting

Divided OPEC to breathe easier with return of $50 oil

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Commodities, oil, world
For feedback, complaints, or inquiries, contact us.
opinion

Suspicious dilly-dallying

October 18, 2019 04:35 AM

opinion

Pacquiao as Malvar

October 18, 2019 04:30 AM

opinion

My ‘huan-na’ uncle

October 18, 2019 04:25 AM

opinion

Redirecting our agriculture

October 18, 2019 04:20 AM

opinion

A meat-free future?

October 18, 2019 04:15 AM



© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.