Oil Dives Deeper in the Red on Mounting Oversupply Worries

Oil Dives Deeper in the Red on Mounting Oversupply Worries

20 April 2016, 06:01
Roberto Jacobs
0
14

Oil Dives Deeper in the Red on Mounting Oversupply Worries

Oil benchmarks on both sides of Atlantic accelerated to the downside in the Asian trading hours, as resurgence of oversupply worries into the markets dampened the sentiment around the black gold.

Oil: EIA inventory report in focus

Currently both crude benchmarks are extending losses, with WTI now sliding -2.21% at $ 41.53 while the Brent oil drops -1.98% to $ 43.16. Oil prices snapped its previous rebound and fell sharply lower after news hit the wires that Kuwaiti oil workers ended a three-day strike that had cut production from the Middle Eastern country.

The prices came under renewed selling pressure in the Asian session after the API crude stockpiles data showed a bigger than expected rise in the US crude supplies last week, accentuating the pain in the already saturated oil markets. Crude inventories rose by 3.1 million barrels in the week to April 15 to 539.5 million, compared with analysts' expectations for a rise of 2.4 million barrels.

The black gold is expected to remain under pressure in the day ahead, as markets expect the US EIA inventory report to show an increase of 1.6 million barrels in crude reserves. While light US economic data on the cards is expected to have limited impact on the dollar-denominated oil prices.

fxs_logo_news.png


Share it with friends: