At the close of June 15 trading session, USA crude West Texas Intermediate (WTI) settled 48 cents or 1% down to $48.01 per barrel while Brent crude futures finally closed 96 cents or 1.9% lower at $48.87 per barrel after hitting lower levels of $48.67 per barrel.
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After starting the day on a weaker note, the crude oil continues to trade lower on Thursday, June 16, 2016, and reached one-month low price levels.
Brent and WTI had largely traded $3-$5 up or down around the $50 mark for weeks due to uncertainty over oil demand and strong technical resistance for crude above $50.
We expect oil prices to trend lower over the next fortnight as it failed to cross the psychological mark of $50 sustainably.
In early trading on Friday, Brent crude had lost its shine, priced at around US$47 with WTI just above US$46 a barrel.
Crude production in Canada and Nigeria has fallen off amid sharp disruptions from wildfires and militant attacks, respectively.
Selling pressure has been inflamed by turmoil on stock markets as traders grow increasingly fearful that Britain will vote next week to leave the European Union, which many warn could precipitate another global rout.
Since June 9, Brent has lost about $5 a barrel, or almost 10 percent.
EIA reported a decline of nearly 933,000 barrels in U.S. stockpiles for the last week, which is less than the analyst’s expectations of 2.3-million-barrel decrease. “The market is now starting to suggest that once the disruptions are behind us, surplus will re-appear and the rally that we have seen in the prices will evaporate”.
Oil industry will be closely watching the Energy Information Administration’s Weekly Petroleum Status Report due tomorrow, which will include the official USA inventories data.
Markets are anxious that a fractured Europe could spell the start of another global recession.
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Meanwhile, oil giants Chevron Corporation and Royal Dutch Shell Plc are putting small refineries on the auction block as the companies seek to reduce margin assets in the midst of headwinds from soaring prices of crude oil. “It is certainly going to be a wild ride for investors and traders going into the June 23 decision”, he said.
