Oil Tumbles on Output Doubts

May 31, 2017 Share Print 0

Oil fell amid doubts that prolonged cuts by OPEC and its allies will succeed in clearing a surplus while U.S. output remains so resilient.

Futures lost 2.5 percent in New York and Brent sank to a three-week low in London. While U.S. crude stockpiles are forecast to have extended declines for an eighth week, American drillers continue to add rigs to shale fields. The OPEC-led deal to reduce production has helped to “stabilize the situation on the world hydrocarbons market,” Russian President Vladimir Putin said at a meeting in Moscow with Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman.

Oil fell after last week’s agreement to prolong supply curbs for nine months by the Organization of Petroleum Exporting Countries and its partners disappointed investors hoping for more. Saudi Arabia’s Energy Minister Khalid Al-Falih said the cuts are working and predicted global inventories will fall to the five-year average early next year.

Bloomberg

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Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.