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Monday, 13 March 2017

I’ll be back: oil’s price slump is tough to kill | The National

I’ll be back: oil’s price slump is tough to kill | The National:

"Like the Terminator returning after being blown apart, this oil market slump is proving hard to kill. At the end of last week, prices, which had been very stable all year suddenly plunged by 8 per cent. This shocked Opec representatives at the industry’s big CeraWeek pow-wow in Houston, but it may not be all bad news for the big oil countries.

Brent crude fell to US$51.37 per barrel from $55.90, its lowest closing price since November 29, while the US’s West Texas Intermediate was even harder hit. The slump came on the back of news showing US crude stockpiles rising to a record high of 528 million barrels, capping nine consecutive weeks of gains. The market was also nervous about signals from Opec ministers that the current deal on production cuts might not be extended after the organisation’s May 25 scheduled meeting and continuing increases in US shale oil drilling and production.


The build in inventories was, in itself, not so surprising. US refineries are going through spring maintenance after running flat out for months, so their crude use is down. It does not necessarily signal that American oil output is stronger than shown in official figures. The International Energy Agency believes that Opec cuts have helped developed-country stocks drop below 3 billion barrels for the first time since December 2015, although China and other emerging nations continue to add inventories."



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