Oil prices fall after jump the day before; glut, economy worries weigh

Oil prices fall after jump the day before; glut, economy worries weigh

Oil prices fall after jump the day before; glut, economy worries weigh

Oil production has been at or near records highs in the United States, Russia and Saudi Arabia, with the USA pumping 11.6 million bpd of crude, more than both Saudi Arabia and Russia.

Oil Daily Chart Broader outlook for crude remains bearish as it snaps the upward trend from earlier this year, but the failed attempts to test the June 2017-low ($42.05) may foster a larger rebound, with a close above the $44.10 (38.2% expansion) to $45.40 (38.2% retracement) region raising the risk for a move back towards $48.10 (23.6% expansion) to $49.00 (38.2% expansion) range.

Worldwide standard Brent crude fell around one per cent to $53.92 per barrel in the early morning as worries over increased supply and poor global economic conditions helped mitigate upwards pressure from the stock market.

WTI for February delivery was 62 cents higher at $43.15 a barrel on the New York Mercantile Exchange.

"I think there is a little bit of over-extension to the downside linked to global market fears". "It's all about equities".

PRICE Futures Group senior analyst Phil Flynn on the outlook for oil prices and the impact on the USA soybean market from the tariff tensions with China. Meanwhile, S&P 500 Index futures fluctuated Wednesday while the benchmark USA gauge is at the brink of sliding into a bear market. Trading was closed on Tuesday for the Christmas holiday. Concerned that a new glut could take shape, Opec and its allies, including Russian Federation, decided earlier this month to return to cutting production in 2019, unwinding a decision taken in June 2018 to pump more oil.

Earlier this month producers' cartel Opec said it would cut output by 1.2m barrels per day in a bid to stabilise the price of Brent at around $60 per barrel.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said some buying interest had returned after firmer trading in USA equity futures.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said some buying interest had returned, but added economic worries will continue to weigh unless Opec reassures the market as to the viability of the supply cuts and "even imposes deeper ones as some members have suggested". This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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