Oil price dip in early Asia trade

Oil price dip in early Asia trade

By Henning Gloystein  Reuters  @hgloystein

U.S. West Texas Intermediate (WTI) crude futures were at $69.81 per barrel, virtually unchanged from their last settlement.

Output from the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) rose by 220,000 barrels per day (bpd) between July and August, to a 2018-high of 32.79 million bpd, a Reuters survey found.

Output was boosted by a recovery in Libyan production and as Iraq’s southern exports hit a record.

Meanwhile, U.S. drillers added oil rigs for the first time in three weeks, energy services firm Baker Hughes reported on Friday, increasing the rig count by 2 units to 862.

Despite the dip, Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA said Brent was “supported by the notion that U.S. sanctions on Iranian crude oil exports will eventually lead to constricted markets”, which he said would likely push up prices.

“Iranian production is already showing signs of decline, falling by 150,000 barrels per day (bpd) last month … (as) importers of Iranian barrels will already be moving away from taking shipments,” said Edward Bell, commodity analyst at Emirates NBD bank in Dubai.

Many analysts have warned that an economic slowdown because of trade disputes between the United States and other major economies including China and the European Union would drag on oil demand.

OANDA’s Innes said it was too early to say whether this would happen.

“While the analysts continue fretting that $200 billion in tariffs could drag down oil demand, it isn’t at all clear that such type of economic headwinds will topple oil prices given … the constant barrage of supply outages,” he said.

Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes