05/07/2017 13:26 AST
Crude oil prices tanked in Wednesday’s trade, snapping its longest winning run since 2010 after Russia ruled out any proposals to deepen the OPEC-led production cuts.
West Texas Intermediate oil CLQ7, -1.47% lost 76 cents, or 1.6%, to $46.31, setting it on track for its first loss in nine sessions. The contract only traded electronically and didn’t settle on Tuesday due to the Independence Day holiday in the U.S.
On Monday, WTI ended higher for an eighth straight trading day, scoring its longest streak of wins since January 2010, when the market rose for 10 straight sessions, according to FactSet data.
Brent oil LCOU7, -1.31% slumped 61 cents on Wednesday, or 1.3%, to $49 a barrel, building on a 7-cent loss from Tuesday.
Futures had traded in tight ranges earlier in Wednesday’s session, but were sent sharply lower after Bloomberg reported that Russia opposes any further restrictions on oil supply other than the ones already agreed. The Organization of the Petroleum Exporting Countries and a group of non-cartel members — including Russia — in May agreed to extend a deal to cut production into the first quarter of 2018.
owever, after oil prices in June dropped to pre-OPEC-deal levels, speculation rose that the major oil producers could extend the accord even further or deepen the cuts. But according to the Bloomberg report, citing Russian government officials, Russia thinks any further supply curbs would send the wrong message to the market and suggest the current pact isn’t doing enough.
After six months of the OPEC-led cuts, the oil market showed early signs of rebalancing in the second quarter and is expected to improve even further in the second half of the year. Fatih Birol, executive director of the International Energy Agency, however, warned on Tuesday that output increases among key OPEC producers such as Libya and Nigeria — that are exempt from the pact — could jeopardize the efforts to make a dent in the global oversupply, according to Reuters.
“Increased oil exports from Libya and Nigeria are attributable to output being significantly expanded in both countries. This will not make it any easier to achieve the market rebalancing that is OPEC’s goal,” said analysts at Commerzbank in a note on Wednesday.
In other energy products, gasoline RBQ7, -1.40% slid 1.6% to $1.51 a gallon, while gasoil fell 1.3% to $445.50 per metric ton.
Natural gas NGQ17, +1.93% jumped 2% to $3.01 per million British thermal unit.
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