Published: Wed, August 16, 2017
Economy | By Melissa Porter

Oil prices steady after overnight tumble on dollar strength, China concerns

Oil prices steady after overnight tumble on dollar strength, China concerns

Investors were also cautious after data published by oil services firm Baker Hughes on Friday showed explorers increased US oil drilling capacity for the second time in three weeks, extending a 15-month recovery.

The price for Brent crude oil was 0.75 percent lower than Monday's close to trade at $50.35 per barrel at 9:15 a.m. EDT.

Brent for October settlement dropped 53 cents to $50.20/bbl on the London-based ICE Futures Europe exchange, The global benchmark crude traded at a premium of $2.87 to October WTI.

This contrasts with more bearish bets placed in the U.S. market, where investors cut net long U.S. crude positions last week, according to the U.S. Commodity Futures Trading Commission.

In a report Monday, the EIA said it expects to see a climb of 117,000 barrels a day in September to 6.149 million barrels a day The report has shown increases in shale-oil production every month so far this year.

Monday's drop in oil prices comes after both OPEC and the International Energy Agency last week said oil production from the cartel had risen in July to nearly reach 33 million barrels a day.

Oil prices continued to fall on Tuesday morning, following a sell-off on Monday triggered by a stronger US dollar, concerns over growing supply from non-OPEC producers, and signs of potential slower oil demand growth in China.

The oil cartel OPEC and a coalition of non-member petrostates agreed nine months ago to reduce their collective production in an attempt to inflate oil prices.

The Saudi Arabian Energy Minister said that the oil-rich kingdom doesn't rule out additional production cuts, nonetheless, this statement failed to excite the markets.

Earlier on Monday, oil prices inched up on the news that the Zueitina oil terminal in Libya had ceased loading cargos as port workers protest, demanding better working conditions.

OPEC won't clear the global oil glut any time soon since any increase in price continues to bolster rival production from USA shale, according to the International Energy Agency.

Oil in NY has been unable to hold a rally above $50/bbl this month as investors concerns on rising global supplies outweigh cuts by the Organization of Petroleum Exporting Countries and its allies. Even so, Citigroup Inc.'s Ed Morse says shale will win over OPEC on oil, as US drillers can survive due to hedging.

Sharara has been producing about 270,000 barrels per day (bpd).

The industry-funded American Petroleum Institute will release its inventory data later on Tuesday.

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