Doha Failure and Future of Oil
Oil prices were slightly weaker on Tuesday, after slumping a day before on a failed Doha talks, with traders turning their focus to fresh US stockpiles data.
London – CrudeOil prices were dropping on Tuesday, ahead of the fresh weekly inventory data that could change the sentiment after oil producers failed to agree on curbing global supply at a Sunday meeting in Qatar.
Futures for WTI dropped 0.44% to trade at $41.01 per barrel while Brent futures slipped 0.51% to $42.69 per barrel.
Both benchmarks ended Monday’s session in the red zone, albeit with smaller losses than they were traded over the day.
The steep losses came after the world’s major oil producers failed to agree on freezing global oil production at January levels.
The disappointment from Qatar came after Saudi Arabia demanded all major countries must be involved in the action, including Iran that was not present at the gathering.
The deal failed as Iran has been repeatedly stating it would not curb its oil production shortly after economic sanctions against the country were lifted. Tehran plans to boost its output to pre-sanction levels – to about 4 million barrels of oil per day.
However, oil prices were partially boosted by a sharp drop in Kuwait’s crude oil output due to an oil worker strike as its production has dropped to 1.1 million barrels per day (bpd) from 2.8 million bpd.
Analysts warn that the affect on prices will be only short term and once Kuwait’s exports fully resume, the market would again focus on ongoing global glut that sees 1 to 2 million barrels of oil pumped every day in excess of demand.
The fresh weekly stockpile report by the American Petroleum Institute will be released later in the day while the official government data are on the schedule on Wednesday.
The market now expects US crude supplies to grow by 2.11 million barrels over the week to April 15, after climbing by 6.63 million barrels a week before.
Meanwhile, analysts are speculating how fast oil prices will grow, with some of them stating the price range will be from $30 to $40 per barrel, while analysts at Citigroup predict that oil prices will rise slowly in the coming period and oil will reach $60 per barrel by next year.
Analysts at Capital Economics continue to predict that Brent will end this year around $45 per barrel.
The News Source: wbponline.com