Oil Prices Fall on Steady Production

Oil prices fell slightly Thursday as concerns about steady production captured the market’s attention.

Light, sweet crude for June delivery settled down 62 cents, or 1%, to $59.88 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 22 cents, or 0.3%, to $66.59 a barrel on ICE Futures Europe.

Traders have been weighing signs that production cutbacks may have bottomed out. Several U.S. producers said in recent quarterly reports that they have met or exceeded their production targets, said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. The International Energy Agency said Wednesday that production is on the rise in other major producers like Saudi Arabia and Russia, offsetting a slowdown some are expecting in the U.S.

“They just keep getting more and more from less and less,” Mr. Cooper said. “I’m personally struggling with that. I don’t think these rig counts can hold production, but they seem to.”

Both the trading range and volatility were small Thursday, fitting an emerging trend. As U.S. production growth and a rally in the dollar have slowed, it has brought calm to what had become one of the world’s wildest financial markets. It has become “a time to reassess,” said Dean Hazelcorn, trader at the brokerage Coquest Inc. in Dallas.

“Prices seem to be going nowhere,” said Daniel Ang, analyst at Phillip Futures. “The fight between oil bulls and bears continue, and it is difficult to pick a side.”

Data by the U.S. Energy Information Administration on Wednesday showed U.S. stockpiles declining 2.2 million barrels last week, which provided some support to prices. U.S. oil production, however, increased over the week and held near a multidecade high at 9.4 million barrels a day.

In its closely watched monthly oil report on Wednesday the IEA said that not only does the decline in U.S. crude inventories pale in comparison with the massive builds of the first quarter, but there are also signs that petroleum product stocks are rising.

Global crude supply was up 3.2 million barrels a day in April, the IEA said. It said while U.S. oil production is slowing, the rest of the oil patch isn’t standing still and pockets of supply growth are emerging from unsuspected corners.

“The market may be starting to lose its upside momentum as the vast majority of the data points circulating around the media airwaves are pointed toward the bearish side,” saidDominick Chirichella, analyst at the Energy Management Institute. “The next several sessions will set the stage as to whether or not the rally will continue or the market will enter into an overdue correction.”

View the original content and more from this author here: http://ift.tt/1K7SlbB

from critical infrastructure alliance http://ift.tt/1L7wTRN
via IFTTT