US drillers to drag down oil price

31 January, 2017

US drillers to drag down oil price

The oil price continued to pull back on Friday as more and more US oil drillers jumped on board to take advantage of higher prices and fill the whole left by Opec when they agreed to cut production.

The Baker Hughes weekly oil and gas rig count from the US showed that the number of oil rigs added was 15 marking the the 12th gain in 13 weeks and bringing the total figure to 566, the most in more than a year,

While the oil price remains above $50 a barrel, some predict that the number of rigs will increase even further which eventually will cause an oversupply and drag the price down,

"We're in a holding pattern at this point in time, supply is a big factor right now and you have the U.S. really filling that gap that OPEC has left open." said Mark Watkins, regional investment manager at U.S. Bank Private Client Group.

analysts at Commerzbank noted that the market was being driven by speculators at the moment who are ignoring the fundamentals and a sharp drop in the oil price may be on the horizon,

“The oil market is currently characterized by rather selective perception: bearish news such as the rising U.S. crude oil and product stocks is being ignored, as is the increase in U.S. oil production,” they mentioned in a note.

“Instead, even the most insignificant report of tightening supply, like yesterday’s news from the U.K.’s Buzzard oil field, is being seen as an opportunity to buy. Given that speculative net long positions in Brent and WTI are already at a record-high level, the correction potential is therefore growing all the time,” they added.

Source link  
Gold remained largely range bound

Gold has remained largely range bound over the past 4 trading sessions but it seems as the today there is momentum gaining to the upside and the formation...

Stagflation a threat to US dollar

The US dollar jumped suddenly after yesterday’s release of better than expected inflation data and then suddenly reversed into negative territory which...

Gold made a run for the $1365 mark

If we look at the arrow on the weekly gold price chart we can see that a resistance point that was first encountered in around august of last year...

Gold awaits direction of Stockmarket

The gold price has remained in a tight range over the last 3 trading sessions as equity markets in the US continue to swing wildly and are now down...

US dollar in for a tough year

The US dollar finished off 2017 mostly weaker against the major currencies despite 3 rate hikes from the US Federal Reserve and although...

RBA misleads investors on AUD

The Australian dollar has dropped sharply in today's Asian trading session on the back of disappointing data and throws into question yesterday...

Brexit doubts pressure pound

The British pound has enjoyed a good run against its US counterpart ever since rumors spread that the EU and the UK were close to reaching a deal...

Gold steady ahead of key news

The gold price is trading slightly higher today as the market awaits the senate testimony later today from Jeremy Powell who is Donald...

Gold looks to go past $1300

The gold price remains well supported today after yesterday’s stellar gains on the back of a less than convincing speech from The US Federal Reserve...