Temporary oil gains lost
Oil turned lower on Thursday after posting gains earlier in the session as traders look ready to test new lows for crude prices with worries persisting over a global glut.
Since peaking in late February, crude has dropped around 20%, with only brief rallies, completely erasing gains at the end of the year in the wake of the initial Organisation of Petroleum Exporting Countries (OPEC) led production cut.
“The market didn't actually buy into the cut for fundamental reasons.
It bought into it because it was a shift in strategy from OPEC and it gave the market hope,” said Matt Stanley, fuel broker at Freight Investor Services in Dubai.
“But (OPEC) didn't do enough and ... other producers were always going to fill the void,” he said.
With output rising in Nigeria and Libya, countries exempt from the deal, and output surging in the United States, which was not part of the agreement, many bulls appear to have thrown in the towel.
The market largely shrugged off comments overnight from Iran's oil minister that members of OPEC are considering deeper cuts in production. A bigger-than-expected cut in US crude stockpiles reported overnight is also barely shifting the dial.
NAMPA/REUTERS
Since peaking in late February, crude has dropped around 20%, with only brief rallies, completely erasing gains at the end of the year in the wake of the initial Organisation of Petroleum Exporting Countries (OPEC) led production cut.
“The market didn't actually buy into the cut for fundamental reasons.
It bought into it because it was a shift in strategy from OPEC and it gave the market hope,” said Matt Stanley, fuel broker at Freight Investor Services in Dubai.
“But (OPEC) didn't do enough and ... other producers were always going to fill the void,” he said.
With output rising in Nigeria and Libya, countries exempt from the deal, and output surging in the United States, which was not part of the agreement, many bulls appear to have thrown in the towel.
The market largely shrugged off comments overnight from Iran's oil minister that members of OPEC are considering deeper cuts in production. A bigger-than-expected cut in US crude stockpiles reported overnight is also barely shifting the dial.
NAMPA/REUTERS
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