US Dollar: How It Impacts Crude Oil Prices
- Author: Eleanor Harrison Apr 18, 2017,
Apr 18, 2017, 0:25
Crude oil prices slipped 1 percent on Monday in subdued trading after a long Easter holiday weekend, on news of rising US shale production and profit-taking following three straight weeks of gains.On Monday, the Energy Information Agency (EIA) said USA shale production in May was set for its biggest monthly increase in more than two years, adding to worries that these increases would undermine efforts of the world's top producers to rein in a glut.Robert Yawger, director of energy futures at Mizuho Americas said market conditions encouraged profit taking.
Brent for June settlement slipped 38 cents to $55.51/bbl on the London-based ICE Futures Europe exchange.
Meanwhile, the price for May futures of West Texas Intermediate (WTI) has dropped by 0.83 percent and stood at $52.74 per barrel.
Saudi Arabia's Energy Minister Khalid Al-Falih said Monday that OPEC members and their allies are showing "very good" compliance with the promised output cuts they began making in January.
Gas prices seemed to find level ground over the weekend after increasing for more than two weeks. "The fact that North Korea's failed missile launch maybe a reason why we are seeing a little bit of a bounce back here", said Peter Cardillo, chief market economist at First Standard Financial in NY.
As a result, March's global oil supply fell, according to the International Energy Agency.
In Libya, fighting between rival factions has cut oil output, but state oil company NOC was able to reopen at least one field and was pushing to reopen another. "If I were OPEC, I'd be pretty anxious". While a production cut by OPEC can lead to a supply deficit in the second half of the year, the sustained addition of oil rigs will put a cap on oil prices as United States oil production rises.
China on Monday reported first quarter GDP rose 1.3% on the quarter compared to the same period a year ago for an annual pace of 6.9%, beating expectations for the year comparison.
Crude traders and investors in Asia also had their first chance to assess a 13th consecutive increase in the rig count by drillers of US shale oil.
The bullish comments from the IEA came a day after the Organization of the Petroleum Exporting Countries' (OPEC) new monthly report on Wednesday, revealed its members cut oil output in March more than anticipated.
China's March refinery throughput also rose to 11.19 million bpd, just shy of December's record, as margins remained attractive.