Crude now trades below all important daily moving averages which is a huge negative.
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“Refining margins in Asia have stayed very strong, certainly much stronger than in 2014, largely because feedstock prices have dropped significantly”, Victor Shum, a vice president at IHS Inc., an Englewood, Colorado-based industry consultant, said by phone from Singapore. They finished the previous session up 17 cents, or 0.4 percent, at $43.04 a barrel.
A firmer U.S. dollar also weighed on oil, making greenback-denominated contracts more expensive for the holders of other currencies. The currency was trading up by 25 basis points (bps) against a basket of six currencies as of 11:06 AM EST, diminishing the attractiveness of the futures for foreign investors.
He did note that since Syria has no significant contribution in oil production, uptick from the tensions should abate some time soon.
Russian Federation on Wednesday accused Turkey of a “planned provocation” and a rescued pilot of the targeted jet said that no warning had been given. Trading in USA futures was muted due to holidays in the country.
Image: Oil prices slipped as focus shifts to supply glut.
Experts have reported that Libya would be resuming its crude oil production in the near future, adding to the oversupply in the market. The fields have a combined capacity of 440,000 barrels a day and could resume full production within seven days of a decision to restart operations, he said by phone Thursday.
Previously, the Organization of Petroleum Exporting Countries (OPEC) led by Saudi Arabia, was vocal about not limiting production amid weakening global demand.
Russian Federation is one of world’s largest oil producers and according to analysts, the current encounter with Turkey contributes significantly to the premium on oil. For instance, the United States Short Oil (NYSEArca: DNO) tracks the opposite moves of the West Texas Intermediate crude oil futures, and the DB Crude Oil Short ETN (NYSEArca: SZO) also tracks the simple inverse of oil.
“We continue to believe that there will not be any change in Saudi or OPEC policy” in Vienna, noted Societe Generale analyst Michael Wittner. Ahead of this year’s meeting, the kingdom has made similar statements. That’ll leave members including Saudi Arabia free to continue pumping even amid calls from Iran to make room for its extra supply after global sanctions over its nuclear program are lifted.
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OPEC maintained it output quota of 30 million barrels per day at June’s meeting.
