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Published: Thu, February 09, 2017
Economy | By Melissa Porter

Oil Prices Lower as Investors Speculate on Supply Growth


However, investors have expressed concerns those polices could be put off as Mr. Trump focuses elsewhere such as on immigration.

"But outside of that, the story is a pretty good one for stocks in terms of it looks like the economy is continuing to grow, I think corporate profits have been pretty good, certainly enough to support higher prices".

He said, "Part of it is being driven by the Chinese who sort of ramped up a mini boom in refining there, which led to record exports for most of past year, so the whole world kind of got swamped with refined products".

General Motors fell 4.7 per cent after the automaker said that fourth-quarter net income fell partly on the strength of the dollar against the British pound and forecast flat 2017 profit per share.

The warning came after Michael Kors suffered a bigger-than-expected drop in comparable sales in the quarter ended December 31.

OIL prices rose yesterday, with traders shifting money into crude futures as the dollar weakened, and as concerns rose that new United States sanctions against Iran could be extended to affect crude supplies.

The oil prices extended falls from the previous session with Brent crude futures trading at 54.70 per barrel, 35 cents, or 0.64 percent down and U.S. West Texas Intermediate (WTI) standing at $51.68 a barrel, 49 cents, or 0.94 percent down from the previous close.

"It's a supply-driven setback".

BP raised the oil price at which it can balance its books this year to $60 a barrel yesterday due to higher spending following a string of investments as annual earnings fell for a second consecutive year.

In its February 2017 Short-Term Energy Outlook, the administration projected an increase up to 98.03 million barrels per day in 2017 and to 99.76 million bpd in 2018. U.S. distillate inventories could have risen by 0.3 MMbbls during the same period. The American Petroleum Institute reported a 14.2 million-barrel increase late Tuesday. Shale explorers are benefiting from prices that rose above $50 a barrel after the Organization of Petroleum Exporting Countries and 11 other nations agreed to trim production in an effort to ease a global supply glut. Ten OPEC members obligated to reduce oil output under the agreement signed in 2016, achieved 91 percent of their required cuts in January, according to the S&P Global Platts survey.

Although this action does not have a direct effect on oil outputs, this issue could contribute to slower production of oil which could eventually decrease in oil output and could send oil prices to rise.

Crude oil prices settled sharply lower in futures market on Tuesday after an industry group reported a far larger rise in weekly US crude stockpiles than anticipated.

While U.S. firms are ramping up production, OPEC is complying with its deal to curb output, Platts reported.

"The draw down in gasoline inventories seems to suggest that much of weak gasoline demand is only temporary", said Phil Flynn, a senior market analyst at the Price Futures Group.

"U.S. shale is coming back, and it's coming back strong".

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