Oil Prices Fall Due To Weak International Demand
7 months ago
Thursday saw oil prices finish the day on a mixed note. Due to continued concerns about growing U.S. crude production, West Texas Intermediate (WTI) crude continued to decline after a drop of nearly 4% a day earlier, .
The Organization of the Petroleum Exporting Countries’ (OPEC) kingpin, Saudi Arabia, said the cartel is likely to reach an agreement next month to extend its production cuts.
On Wednesday, WTI oil prices fell by 3.8% on Nymex, marking the steepest drop since March 8. The decline was mainly due to the surprise increase in U.S. gasoline stockpiles pointing to a weaker-than-expected demand at a time when consumption of gasoline usually rises.
Despite low expectations, crude oil prices staged a three-day rally last week. Members of the OPEC and non-members such as Russia are expected to extend production cuts beyond June. OPEC and Russia will meet in late May to decide whether the cutbacks should be extended until the end of this year.
Meanwhile, prices for natural gas fell as the EIA reported a larger-than-expected weekly climb in U.S. supplies of the commodity.
However, prices fell on Friday after energy services firm Baker Hughes said the U.S. rig count increased by 10, reaching 662 last week, making the first quarter the strongest for oil rig additions since mid-2011.
Among exchange-traded funds, the United States Oil Fund USO (- 0.75%) fell 0.6 points.