On Wednesday, crude prices fell to their lowest level since November as growing US production is undermining supply cuts by OPEC and Russia.
Brent was trading 26 cents down at $45.76 per barrel, while US West Texas Intermediate dropped 20 cents to $43.31.
“The lack of a positive response in oil prices clearly suggests market participants are not convinced that the OPEC’s efforts will help shore up prices in a meaningful way in the short-term as shale supply continues to rise in the US,” said Fawad Razaqzada, market analyst at futures brokerage Forex.com, as quoted by Reuters.
“Unless we see a marked reduction in crude stockpiles, the possibility of further short-term falls in the price of oil cannot be ruled out,” he added.
“It will be hard for Saudi and Russia to keep cutting production in the face of a strong rise in US crude production and output in Libya,” Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo told Bloomberg.
The United States will report on its crude stockpiles later on Wednesday.
Reuters sources told the news agency that Saudi Arabia, Russia and other OPEC and non-OPEC producers were compliant with the output deal. Compliance reached 106 percent in May, the sources said.
However, while the major producers are committing to the Vienna deal on paper, they increased production right before the deal.
“A number of producers – notably Iraq, Saudi Arabia and Russia – aggressively ramped up output in the run-up to the deal, fast-tracking projects, expanding drilling programs and deploying spare capacity,” BMI Research said in a note.
Oil prices are down 22 percent from early January, eclipsing the 20 percent needed to qualify for a bear market.
Price at the pump keeps going up up up.
All those taxes, fees and other BS forced on the consumer remain once the base price of gas increases, as it always does.
damn tyrants
The lowest price I can find in my area of AZ is $2.09, 6 months ago it was $1.79.
“Unless we see a marked reduction in crude stockpiles, the possibility of further short-term falls in the price of oil cannot be ruled out,”
Whatever.
It makes zero difference in the pump prices.
I guess that’s why they are pushing their attack on Syria. Gotta find a way to spend oil and to keep them prices high.
High price at the pump? As Ron Paul pointed out years ago during the “debates”, the US is paying over $350 per gallon for diesel in Afghanistan!! All part of the war machine’s negotiations with Halliburton, et al.
Once the US controls the oil regions around the Black Sea, “they” will control nearly ALL the world’s supply and the availability will dry-up and prices will rise. “They” want us all immobile and frozen in winter…willing to do whatever we’re told for a little heat.
What other giant group controls an entire commodity and it’s availability? The Central Banks. And who runs those? The same group that’s working hard to capture the oil. The Jooooz. Bastards.