dglobalnews.com Oil Prices Turn Corner After WTI Dips Below $45
Published: Sat, May 06, 2017
Markets | By Armando Jensen

Oil Prices Turn Corner After WTI Dips Below $45

OPEC and other countries that agreed to cut crude production are converging on the need to extend the pact beyond June to help to clear a supply glut, Saudi Arabia's OPEC governor said on Friday.

"If OPEC comes out with a negative message and no cooperation the market might trade down to $45", Mr. Schieldrop said, adding that the expectation was that OPEC would take action to reassure investors that they aren't going to flood the market with oil. "The entire commodity space was weaker", Tran said.

Both Brent LCOc1 and USA crude CLc1 fell nearly 4 percent overnight on mounting concerns about oversupply. Oil prices stabilized in Asian trading Friday after hitting a five-month low while regiona.

The Japanese yen weakened 0.14 percent at 112.62 per dollar, while Sterling GBP= was last trading at $1.2965, up 0.35 percent on the day.

Analysts said traders are anticipating the euro will rise above a technical barrier of $1.10 if, as expected, centrist Emmanuel Macron defeats anti-EU candidate Marine Le Pen in Sunday's vote.

OPEC's combined water-borne shipments of almost 24 million barrels a day in March were up slightly from October levels, before OPEC hammered out the deal to cut output. World shares are up for a third week and hit a record high on Wednesday.

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"Despite a possible extension of the OPEC agreement... prices are likely to continue their slide in Q2 and I see higher chances of them dropping below $45 than rising above $55", said Eugen Weinberg, head of commodities research at Commerzbank.

The dollar and USA government bond yields barely budged though. They had to duck for cover overnight as both Brent and US crude prices fell more than 3 percent to below $47 a barrel at one stage on mounting concerns about global oversupply. Both had been nudged lower by the commodity market worries.

Benchmark Brent also fell 3% to below US$47, its lowest since Nov 30, which was the date the Organization of the Petroleum Exporting Countries (OPEC) triggered a rally, when it said it would cut production in the first half of 2017. It is set to be the fourth weekly fall on the trot for the greenback which is now at its lowest since November. Dow and S&P 500 futures were both up 0.1 percent after being lower earlier.

China markets have also been wobbling in recent weeks but the commodity market woes have been the central focus.

Oil prices found their footing after tumbling during US trading on uncertainty over whether OPEC will extend an agreement to cut production to shore up prices.

"We still have some downside risk, but we're starting to get near the bottom".

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