USA oil rig count falls by 10: Baker Hughes

USA oil rig count falls by 10: Baker Hughes

Do not invest more money than you can afford to lose.


Kang said a stronger USA currency if US interest rates are hiked in coming months could weaken demand for dollar-denominated crude oil futures, as the contracts will be considered expensive to other currency holders. In Cushing, where the WTI contract is delivered, inventories rose by 2.14 million barrels in the week to Tuesday, according to energy monitoring service Genscape.

“The question is how long the support will hold as there’s going to be a new battle to get below $40 after this”, said Tariq Zahir, who trades mostly in crude spreads at Tyche Capital Advisors at Syosset, New York.

The expiration of the December contract on Friday increased volatility, leading to swings in prices as traders rolled over to the most-active January contract.

In its latest snapshot, API said total USA petroleum deliveries, a metric used to gauge demand, was down about 0.3 percent last month when compared with October 2014. “Markets are a bit fearful that Iranian oil could come in”. The number of rigs drilling for oil in the US, which is viewed as a rough proxy for activity in the oil industry, has fallen sharply since oil prices started falling past year.

In recent years, the competition from the USA refineries in Europe intensified as they had access to oil at a significant discount to Brent.

US crude stockpiles expanded to 487.3 million barrels through November 13, according to Energy Information Administration data.

“We have been forecasting weak commodity returns since last fall, although the extent of this weakness has far exceeded our initial expectations”, the analysts wrote.

This news is ahead of the OPEC meeting scheduled on December 4 in Vienna, when Saudi Arabia is expected to stick to its policy of pumping enough oil to protect its global market share despite the financial pain inflicted on the Kingdom’s economy.

What we do know is that demand is unlikely to pick up and with global economic growth forecasted to slow down in 2016, bearish market conditions for oil will only continue to weigh down oil prices.

Gasoline futures rose 1% to $1.30 a gallon, while diesel futures were little changed at $1.35 a gallon. Heating oil posted a 1% weekly drop. However, at 140.32 million barrels, distillate supplies are still 22.2% above the year-ago level and are in the middle of the average range for this time of the year.

Top Forex Brokers

BrokerCountryRatingMin. DepositWebsite
--- Click for a special offerWebsite
--- Click for a special offerWebsite

Leave a Reply

Your email address will not be published. Required fields are marked *