Oil prices extend fall from last week

30/01/2017 11:40 AST

Oil futures fell on Monday on rising U.S. oil output, extending a slide from the end of last week.

On the New York Mercantile Exchange, light, sweet crude futures CLH7, -0.21% traded at $52.89 a barrel, down 28 cents in the Globex electronic session. Brent crude on London’s ICE Futures exchange LCOH7, -0.36% fell 29 cents to $55.23 a barrel.

“The rise in U.S. output should not be unexpected; however we expect the reductions being made by OPEC [the Organization of the Petroleum Exporting Countries] will far exceed any rise in the U.S. and quickly reduce the global inventory that has been built up over the past two years,” ANZ Bank said in a report.

Oil-market action has largely been driven by OPEC and its recent decision with its allies to cut a collective 2% of global crude supply, a move aimed at balancing the market following more than two years of low prices and excess inventories.

“Crude oil is stuck in a range. Even the triggers for moving crude prices are benign,” says Gnanasekar Thiagarajan, director of Commtrendz Risk Management. Crude oil prices have been see-sawing between gains and losses in recent weeks.

“The rebalancing in the market will certainly happen, but with supplies increasing in the U.S., prices will move in a tight range,” said Thiagarajan, adding that prices may move with a “bullish bias” through 2017 because of the OPEC pact on trimming output.


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