Oil products are still putting pressure on prices.
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Brent Crude, which is used to price global oils, fell 26 cents to $47.28 a barrel in London. Refiners used crude as input for diesel, gasoline, jet fuel etc. The consistent lower prices meant lower cost of input, and hence higher margins.
Swift Worldwide Resources estimates that more than 200,000 jobs in the oil and gas industry have been cut worldwide since prices collapsed previous year. Then ExxonMobil doesn’t have to make knee-jerk reactions to the price of oil based on a few months or a year.
Research consultancy Energy Aspects said product stocks rose by 0.6 million barrels per day in the third quarter. The build-up of inventories coupled with mild winter for Europe and the United States will further reduce the production levels.
The bearish outlook led more speculators to sell out of long positions on crude oil, with holdings slipping by 18,597 contracts last week to 184,939 lots, InterContinental Exchange data showed. With this decline, the WTI-Brent spread has lowered, and there exists a less likely opportunity for downstream companies to refine oil. The U.S. is also poised to announce new home sales figures for September shortly. Globally-traded commodities like gold and crude oil are denominated in the U.S. dollar.
December West Texas Intermediate (WTI)crude eased 78 cents or 1.7 percent to close the week at $44.60 a barrel on New York Mercantile Exchange. The oil price is now breaking key technical resistance around the US$43.50 level and the question emerging is whether oil is going to pivot back up to US$50 or plummet to re-test its August lows below US$40.
The falls came after Fatih Birol, executive director of the worldwide Energy Agency, said at an energy conference in Singapore on Monday that it saw “ample supply in the market” until mid-2016.
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That would mark the first time oil investment has declined for two years in a row since the mid-1990s.
