Crude oil prices plunge sharply on Thursday

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Gaining back some of those losses, Brent crude futures LCOc1 were at $51.83 per barrel at 0708 GMT, up 0.37 cents, or 0.7 percent, from their last close.

The official said the downfall in global crude prices following the OPEC's meeting in Vienna had come as a shock to him though he expressed hope that, the will of OPEC members will help lift up oil prices in the near future.

"I don't think the cuts are enough for (OPEC) to reach their goal in a nine month period and this is reflecting that", said James Williams, president of WTRG Economics in London, Arkansas. Some countries expected the extension to be limited to next 6 months but some of the OPEC partners projected to be nine months but some countries like Russian Federation are projecting it to gone beyond 9 months and expected to be continued until 12 months.

As of 08:51 (MSK) July futures for Brent of Brent crude fell 0.60% to $51.13.

Overnight on Wall Street, the S&P 500 .SPX and the Nasdaq .IXIC closed at record highs after strong earnings reports from retailers. However, the extent of production cut is retained at 1.8 billion barrels per day.

According to Business Insider, with 19 straight weeks of rig additions and oil near $50 a barrel, producers are clearly more confident in market conditions than they were a year ago.

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Rather than restrain output, USA producers are expected to increase output by more than 1 million barrels of oil per day next year.

Prices plunged after OPEC and other major exporters extended their deal to limit oil production for nine months , disappointing investors who were anticipating deeper output cuts.

That's because U.S. shale oil producers have taken advantage of the uptick in prices since past year to ramp up production.

Concerns remain that OPEC-led production cuts will support a further rise in output from the United States, where producers can operate at much lower costs.

US oil production C-OUT-T-EIA has risen more than 10 percent since mid-2016 to more than 9.3 million bpd. But stubbornly high fossil fuel inventories - which have been maintained worldwide, but are most readily measured in the US due to open customs data - have prevented the measures from buttressing oil prices in a lasting way.

"The negative oil reaction to a 9-month OPEC production cut extension is a prime example of "buy the rumour, sell the fact".

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