Oil prices decline amid falling bullish bets

Lloyd Doyle
March 13, 2018

US West Texas Intermediate (WTI) crude futures were at $62.22 a barrel up 18 cents, or 0.3 per cent while Brent crude futures were at $65.70 per barrel, up 21 cents, or 0.3 per cent, from their previous close.

Brent crude, which is the worldwide benchmark of crude oil, had opened 2018 at $64.73.

Oil prices were under pressure as speculators pared their bullish wagers on USA crude oil, with long positions falling last week for the first time in three weeks, according to Reuters. Gross short positions on the New York Mercantile Exchange climbed to their highest in almost a month.

Traders attributed the recent increase to a drop in the number of United States drilling rigs for production and the reported job increase in the U.S. which is expected to push fuel demand higher. In oil markets, USA energy companies last week cut oil rigs for the first time in nearly two months with drillers cutting back four rigs, to 796, Baker Hughes energy services firm said on Friday.

USA production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russian Federation, according to the International Energy Agency (IEA).

The Organization of the Petroleum Exporting Countries (OPEC), together with a group of other producers led by Russian Federation, has been withholding production since the start of 2017 to prop up prices.

"Oil prices fell on the back of concerns that surging United States production. could push inventories in the U.S. higher", ANZ bank said on Tuesday.

Also on Sunday, Saudi officials said they would be delaying the initial public offering of Saudi Aramco until 2019. The dollar tends to have an inverse relationship with oil prices, as a weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.

Other reports by Iphone Fresh

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