LONDON, Aug 01, 2015 – Oil prices hit fresh multi-month low points
this week, with no sign of an end to a global supply glut.
Metals, including gold and copper, stabilised after a recent rout fuelled
by cracks in the Chinese economy.
OIL: Brent crude hit $52.28 a barrel on Tuesday, the lowest level since
The same day, New York’s main contract dropped to $46.68 a barrel, the
lowest point since March 24.
After briefly recovering, both contracts tumbled on Thursday after Abdullah
El-Badri, secretary-general of the Organization of Petroleum Exporting
Countries, said the group would not cut output in response to lower prices.
Speaking in Moscow after meeting Russia’s energy minister, he said the
cartel is “not ready” to cut production, which is currently at around 30
million barrels per day.
Analysts said the statement shows OPEC is determined to defend its market
share as it fends off competition from US shale oil.
“OPEC is telling the market that cuts will not come from them,” said Daniel
Ang, an investment analyst with Phillip Futures in Singapore.
OPEC is “emphasising that it is fighting for market share”, he added.
At its most recent meeting in Vienna in June, OPEC kept its output levels
despite the supply glut that has depressed oil prices.
Crude futures are under pressure also owing to the strength of the US
currency, which makes dollar-priced oil more expensive to holders of weaker
units, dampening demand.
The dollar has picked up steam on expectations the Federal Reserve will
raise US interest rates later this year.
The chances of a September lift were raised Thursday after data showed the
US economy expanded 2.3 percent in the April-June period, the strongest pace
since the third quarter of 2014.
“The second-quarter GDP data support the Fed’s more upbeat tone on economic
conditions and suggests that the economy could cope with higher interest
rates,” research firm Capital Economics said.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for
delivery in September slid to $52.69 a barrel from $54.42 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light
sweet crude for September fell to $47.66 a barrel from $48.01.