Breaking News
0

Oil prices drop on oversupply concerns as OPEC output increases in July

CommoditiesJul 31, 2018 03:02AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Oil tanker unloads crude oil at a crude oil terminal in Zhoushan

By Aaron Sheldrick

TOKYO (Reuters) - Oil prices fell on Tuesday, with Brent futures set for their biggest monthly loss in two years, as oversupply concerns rose after a Reuters survey showed OPEC output rose in July to its highest for 2018.

September Brent crude futures fell 25 cents, or 0.3 percent, to $74.72 a barrel by 0654 GMT after rising nearly 1 percent on Monday. The September contract expires later on Tuesday and the more-active October contract was down 0.3 percent at $75.35.

U.S. West Texas Intermediate crude futures (WTI) were down 24 cents, or 0.3 percent, at $69.88 a barrel, after rising more than 2 percent in the previous session.

For the month, Brent futures are set to drop about 6 percent, the most since July 2016, while WTI futures set to decline 5.8 percent, the biggest monthly drop since October 2017.

The Reuters survey showed OPEC increased production 70,000 barrels per day (bpd) to 32.64 million bpd in July, the most this year.

The group has pledged to offset the loss of Iranian supply as looming sanctions have already started to cut exports from OPEC's third-largest producer.

U.S. President Donald Trump appeared to soften his approach to Iran, saying on Monday he would meet with President Hassan Rouhani without any preconditions. This was only a week after he threatened on Twitter to unleash severe consequences on the country.

The United States has indicated that it wants Iranian exports cut to zero under the sanctions it pledged to reintroduce in May and that would go fully into effect in November.

While prices were softer on Tuesday, there are bullish signs in the refined products market, said Virendra Chauhan, an oil analyst at Energy Aspects in Singapore.

"Products demand has started to improve and if products are strong, crude spreads, which are currently weak, will be dragged up," he said.

"The crude market should not ignore the recent turn in products, especially as this pick-up in demand comes at a time when Iranian crude exports should start to fall," Chauhan said.

Some support for prices may also be found in inventory data to be released this week.

Six analysts polled ahead of reports from the American Petroleum Institute (API), an industry group, and the U.S. Department of Energy's Energy Information Administration (EIA) estimated, on average, that crude stocks fell about 3.2 million barrels in the week ended July 27.

The API is scheduled to release its data for last week at 4:30 p.m. EDT (2030 GMT) on Tuesday, and the EIA report is due at 10:30 a.m. EDT on Wednesday.

Oil prices drop on oversupply concerns as OPEC output increases in July
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email