Futures slipped by 1.7% in New York after soaring 3.2% in the three earlier sessions
Having shown a price rally in the recent weeks, crude oil prices have started declining once again. Currently, West Texas Intermediate is trading at $53 per barrel down by 1.83% while Brent crude is trading at $56.03 per barrel down by 1.87%. The decrease came as drilling activities in the US have surged giving rise to doubts if any OPEC cuts would actually be implemented for long and if yes, would all key members of the oil exporters’ group contribute to that.
Futures slipped by 1.7% in New York after soaring 3.2% in the three earlier sessions. Having said that, it shall be noted that according to a representative of the group of armed youths, Niger Delta Avengers, will soon restart its bombings on foreign oil facilities and pipelines across the southern Delta. Big oil including Chevron Corporation (NYSE:CVX), BP plc (ADR) (NYSE:BP), Exxon Mobil Corporation (NYSE:XOM) and Royal Dutch Shell plc (ADR) (NYSE:RDS.A) have a large presence in the Niger Delta and account for most of Nigeria’s production. Therefore, any attacks would be a benefit for the global energy prices, striving for a supply cut so that they could grab some gains.
On the contrary, Libya, a key member of the OPEC that has been exempted from the oil cuts, is putting in efforts to re-open crude oil fields. These include the lucrative El-Feel field, an indication that increases in the country’s oil output would add up to the global oil supplies, hampering the energy market.
Another stark parallel that The Country Caller has drawn is between the Gulf oil rich nations like UAE, Saudi Arab and Qatar which have curbed their output levels ,while, on the other hand, Baker Hughes has shown US drillers adding rig for a tenth week straight.
Tamas Varga, analyst at PVM Oil Associates stated: “Developments over the weekend are putting the oil complex under fresh pressure.”