• Sunday, June 23, 2024
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BusinessDay

Oil price in sharp fall to $46.85/bl

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Brent oil is trading much lower Friday morning at $46.85 per barrel after trimming its biggest weekly decline in five months.

The high daily fall in oil price came as investors weighed the largest drop in US output since 2013 against a smaller-than-expected stockpile decline.

Yesterday, oil prices lost -4.8% after government data showed crude stockpiles fell -2.2 million barrels last week, less than the forecast -2.5 million barrel decline and the -6.7 million drop reported by the industry-funded American Petroleum Institute.

Analysts say oil traders were mulling the fact that US crude production fell 194kbpd last week (-2.3%) – the most since Oct 2013, versus a pickup in rig counts, disappointing gasoline demand, a reduction in run rates by refiners and shifting investor sentiment in the near term.

The next major catalyst for the market is rig count data out later today and which might show a continuation of the recent trend of adding rigs should weigh on prices.

Two projects worth $45 billion announced this month show the world’s largest oil companies are regaining the confidence to make big investments, emboldened by rising crude prices and low costs that promise to trigger more expansion ahead.

Chevron Corp. gave the go-ahead to a $37 billion expansion in Kazakhstan, the industry’s biggest undertaking since crude started tumbling two years ago.

BP Plc signed off on the $8 billion expansion of a liquefied natural gas plant in Indonesia. Two more big projects are likely to get a green light this year, according to industry consulting firm Wood Mackenzie Ltd. and Jefferies International Ltd. — BP’s Mad Dog Phase 2 in the Gulf of Mexico and Eni SpA’s Coral LNG development off Mozambique.