Cabot Oil & Gas Corporation (NYSE:COG), share price decreased in the last trading session with a previous 52-week high of $35.58.
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OPEC has pumped at near record levels since 2014 attempting to drive the producers that have higher costs like the shale firm in the USA out of the market.
Bearish sentiment remains strong, fuelled by an OPEC decision earlier in December to abandon setting a production ceiling for the oil cartel and a likely rise in Iranian supplies after sanctions are lifted. “Russian Federation also significantly increased production, and possible lifting of sanctions against Iran in 2016 may flood the market even with more oil”, Moody’s senior vice president Terry Marshall said. “OPEC has a major role in shaping oil prices and availability”, he told reporters after meeting OPEC Secretary General Abdullah al-Badri under the India-OPEC Dialogue.
WTI for January delivery climbed 78 cents, or 2.2 percent, to $36.40 a barrel at 12:24 p.m. on the New York Mercantile Exchange. Volatility is not some accidental attribute of commodity markets, it is their defining characteristic. Asian stocks traded in the red but European stocks showed more signs of life, recovering from their worst week in nearly four months to open this week on a positive note.
Also looming large is an expected increase in United States interest rates this week. US output has fallen though not by much, while production from Russian Federation – another big non-OPEC player – has risen.
“The tone is clearly negative today, but not almost as negative as it was when you had a $34 handle on WTI, that was a key pivot point”, said Art Hogan, chief market strategist at Wunderlich Securities in NY.
On Friday, the Dow sank 1.8 percent and the S&P 500 lost 1.9 percent.
Global crude prices have been falling for months, with the latest plunge coming as Iran renewed its pledge to boost its crude exports, adding to the glut of oil on the world market.
The Middle Eastern country is on track to ship 1.26 million barrels a day (bpd) of crude this month, according to an industry source with knowledge of tanker loading schedules. If the ban is lifted, analysts say, the US benchmark could trade equal to or even higher than Brent prices.
The International Energy Agency, the leading energy forecaster, said oil stockpiles are expected to swell throughout next year, albeit at a slower pace than in 2015.
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This seasonal weakness is compounding a structural oversupply as 0.5 million to 2 million barrels of crude per day (bpd) is produced in excess of demand.
