Published: Tue, March 13, 2018
Business | By Kate Woods

Worry Over Rising US Output Causes Crude to Drop 1.1 Percent


The news is expected to be light on Monday so most traders expect the price action to be driven by the U.S. Dollar and appetite for risk. US West Texas Intermediate (WTI) crude futures fell 68 cents, or 1.1 per cent, to settle at US$61.36 per barrel.

Oil prices shot up more than 3 percent in Friday trading after oil and gas services company Baker Hughes reported a dip in rig activity in North America.

Singapore-based brokerage Phillip Futures said that the oil market "will focus on OPEC and IEA (monthly) reports this week for a sensing on global demand/supply levels for crude oil" and that "items in focus will include OECD commercial stock levels, revision in global demand and supply for crude oil and OPEC's compliance on production levels".

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"Last week's action was dictated by broader markets - movement in the dollar and the potential impact of steel tariffs", Matthew Smith, the director of commodity research at ClipperData, told UPI.

Meanwhile, bets that oil prices will fall on the New York Mercantile Exchange climbed to the highest level in almost a month.

Brent crude, which is the worldwide benchmark of crude oil, had opened 2018 at $64.73.

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Brent crude futures were at $64.04 per barrel at 1353 GMT, down 45 cents from their previous close. "They continue to give market share away to the U.S". "Not fair to our farmers and manufacturers".

The most significant price action this week is likely to take place after the release of the American Petroleum Institute's weekly inventories report on Tuesday and Wednesday's U.S. Energy Information Administration report. Some of the steel and aluminum products necessary for energy infrastructure are niche products not typically manufactured in the United States.

Investors are said to be weighing rising USA output (which continues to climb even though rig counts were cut slightly last week) and supply against the possibility that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers will maintain its supply cuts this year and possibly even next.

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