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Commodities - Oil Prices Hover Near 5-month Low

14 June 2019

WTI was down $2.19, or 4.1 per cent, at $51.29 a barrel.

Stocks at the Cushing, Oklahoma, delivery hub rose by 1.8 million barrels, the EIA said. During the session, WTI touched a low of $50.60 a barrel, its lowest since January 14.

The West Texas Intermediate for July delivery sank 1.8 USA dollars to settle at 51.68 dollars a barrel on the New York Mercantile Exchange, while Brent crude for August delivery tumbled 1.34 dollars to close at 60.63 dollars a barrel on the London ICE Futures Exchange.

Brent futures sank as low as $59.45, also its lowest since mid-January. The report also showed a 208,000 barrels increase in gasoline supply last week while distillate stockpiles declined by 1.08 million barrels.

Meanwhile, weekly USA oil production ticked up to an all-time high 12.4 million bpd, according to a preliminary reading from EIA.

"Obviously it's more than enough to satisfy demand by a lot and just makes for a really bearish report across the board". President Donald Trump's threat last week to slap tariffs on Mexican goods, exacerbating fears that global economic growth will slow and cut demand fuel.

Ole Hansen, head of commodity strategy at Saxo Bank, said "the tight supply focus (is) switching to increased risk of lower growth and demand", and that "an escalation of the U.S".

"Yesterday's upswing on the back of rising stock markets was halted by an unexpectedly sharp rise in USA crude oil and product stocks", Commerzbank said.

Oil had risen earlier in the day on optimism that the cartel and its partners would move to stabilise prices.

"Really $50 is legitimate support zone [for WTI] because we had a hard time getting up and through that on the rally through December", Kilduff said.

The Kingdom is closely monitoring developments in the oil market, which saw a high level of volatility in recent weeks, Saudi Energy Minister Khalid Al-Falih said in an interview with Arab News on Monday.

However, Russia's oil companies have begun to chafe under the quotas.

Global oil prices are expected to teeter for the remainder of the year, as trade tensions and USA crude inventories buildup continue to incur losses, yet output cut efforts by OPEC and its allies (OPEC+) would underpin the market, according to analysts at the world's leading investment banks.

The 14-member OPEC and its 10 allies led by Russian Federation are due to met in Vienna on June 25 to discuss further production cuts to balance the market.

Oil prices resumed their slide on Wednesday, dragged down by an unexpected gain in USA inventories, while gasoline and distillate inventories built more than expected, industry group the American Petroleum Institute said on Tuesday.

Commodities - Oil Prices Hover Near 5-month Low