Oil to see more declines on higher US output

Oil to see more declines on higher US output
(Photo credit: Arabianeye - Reuters)

By: Mahmoud Gamal

Mubasher: The price of oil is expected to fell below $50 this week with increased US inventories, according to analysts.

Last week, Brent crude oil shed 0.76% to $51.76 per barrel; US crude also lost 0.6% to $48.78 per barrel.

Baker Hughes Oilfield Services on Friday announced that the number of US oil rigs grew by 5 to reach a total of 631 in the week which ended on 17 March.

Technical analyst Mohamed Zaidan said that the oil market entered a short-term correction wave last week amid high inventories and amount of oil rigs.

Eleven non-OPEC oil producers that joined a global deal to reduce output and boost prices delivered 64% of promised cuts in February, still lagging the higher levels of OPEC itself, Reuters quoted an industry source on Friday.

OPEC and other producers agreed to cut oil output by 1.8 million barrels per day (bpd) starting from 1 January to boost prices and reduce a supply glut.

Zaidan added that prices are still between the levels of $55-$55.5, expecting that they will fall to $52.50 in the coming period.

Translated by: Sara Ghali

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Source: Mubasher Exclusive