SINGAPORE (Reuters) – Oil struggled to find its base on Wednesday after dropping 7 percent from its previous session, with a sharp supply and a bright unpredictable demand for scaring off investors.
FILE PHOTO: The oil comes from Edwin Drake's original 1859, which launched the modern oil industry at the Drake Nou Museum and Park in Titusville, Pennsylvania, USA on October 5, 2017. REUTERS / Brendan McDermid / File Photo
The US West Texas Intermediate (WTI) crude futures were $ 55.52 per barrel on March 0732, which is 17 cents or 0.3 percent of their last settlement.
International Brent crude futures contract LCOc1 fell by 9 cents to $ 65.38 per barrel.
Since the beginning of October, crude oil has lost more than a quarter of its value, which has become one of the biggest drops since falling prices in 2014.
"Future crude oil products were mostly in the middle of a slowdown … weaker market basics," said Benjamin Lu, Phillip Futures analyst at Singapore.
The drop in spot prices has redefined all of the crude oil front curve upside down.
The spot prices in September were significantly higher than those for later delivery, a structure known as a return, meaning a limited market, because oil storage is unattractive.
From mid-November, the curve was strained by contango when raw deliveries were cheaper for immediate delivery than those for later shipment. This means too much supply in the market as it makes it attractive to store oil for later sale.
Both sides are pressured on oil markets: rising supply and increasing concerns about the economic downturn experienced by the Japanese and German power plants in the third quarter, as well as China's car sales.
The US Department of Energy Energy Information Administration (EIA), the US Department of Energy Information Administration (EIA), estimates that the US's seven largest shale basins will reach 7.94 million barrels per day in December.
This increase in land-based output has contributed to a record US $ 11.6 million bpd in total US oil production in the C-OUT-T-EIA, making the United States the world's largest oil producer before Russia and Saudi Arabia.
Most analysts predict that the US output will increase by 12 million bpd in the first half of 2019.
"In our opinion, this in our opinion will exceed the price above $ 85 per barrel (on oil prices)," said Jonas Anderson, Head of Vontobel Asset Management's commodity position.
Growth in US production contributes to stock growth.
Official storage data is being submitted on Wednesday from the Energy Information Administration, where analysts predict that stocks of commercial petroleum products will increase by 3 million. Barel
A cartel with the oil-exporting countries (OPEC) producers is alarming with supplies and falling prices.
OPEC is increasingly publishing announcements that it will start charging crude oil in 2019 to boost supply and raise prices.
"OPEC and Russia are forced to reduce current production levels and this is the decision we expect from the next OPEC meeting on December 6th," Anderson said.
This causes the OPEC to collide with US President Donald Trump, who publicly supports low oil prices and who has called for OPEC not to cut production.
Henning Gloystein reports; Edited by Joseph Radford and Richard Pulin