Oil Prices Slip to 6-Week Low, Brent Falls Below $70
Crude oil prices fell to a six-month low Wednesday on the back of an expected supply boost and the negative effects of U.S. President Donald Trump’s trade wars amidst a slowdown in the American economy.
West Texas Intermediate crude oil for April delivery was last seen down US$1.35 to US$66.91 per barrel, the lowest since Sept. 10, while May Brent crude was down US$1.12 to US$69.92.
In its weekly survey of private oil inventories, the American Petroleum Institute said stocks fell by 1.46 million barrels last week, exceeding the consensus estimate for a drop of 0.3 million barrels, according to Oilprice.com.
The Energy Information Administration, EIA, is expected to release official storage data later on Wednesday. Despite the drop, traders are seeing the prospect of rising supply as OPEC+ is set to begin returning 2.2 million barrels per day of production cuts to market in 18 monthly tranches beginning next month.
Slowing U.S. growth is also clouding the market after Donald Trump on Tuesday launched a trade war on Canada and Mexico, the two largest U.S. trading partners, amid an already slowing economy.
The Federal Reserve Bank of Atlanta’s GDPNow forecast expects the U.S. economy to contract by 2.8% in the year’s first quarter.
Latest ADP private sector employment report showed hiring collapsed last month, with just 77,000 new jobs added, down from 186,000 in January and well below the FactSet consensus estimate for 142,500 positions.
“Inauspicious economic prospects naturally weigh on oil prices, and when it is coupled with the announced plan from OPEC+ to start putting barrels back into the market from April onwards, the only way is down.
“However, it is worth mentioning that the same way as the US President might be kept under control by the stock market performance, the decision to increase oil production could easily be reversed in the absence of any meaningful price recovery in the coming weeks, limiting further downside potential,” PVM Oil Associates noted.
On February 19, the EU member states agreed on new sanctions banning aluminum imports from Russia and targeting the Russian shadow fleet. The new sanctions, the full details of which were not shared, will include a phased ban on the import of Russian aluminum products into the EU and stricter measures targeting crude oil sales.
A total of 73 shadow fleet tankers used by Russia to export crude oil while circumventing restrictions, along with some Russian banks, many individuals, and companies will be added to the sanctions list.
Meanwhile, Russian officials argue that the world is not limited to Western countries and the shadow fleet is no different from other tankers. #Oil Prices Slip to 6-Week Low, Brent Falls Below $70 BEDC Builds New 33kv Feeder Line to Improve Power Supply in Edo
