Oil prices ended mixed on Thursday after a seesaw trading session, as investors weighed rising U.S. production against geopolitical uncertainties and comments from leading Gulf oil producers that an extension to OPEC-led supply cuts was likely.
Oil prices ended mixed on Thursday after a seesaw trading session, as investors weighed rising U.S. production against geopolitical uncertainties and comments from leading Gulf oil producers that an extension to OPEC-led supply cuts was likely. The benchmark U.S. crude contract, West Texas Intermediate futures, settled down 17 cents for a fourth straight day of losses, to $50.27 a barrel. Brent futures posted modest gains, however, ending up 6 cents to $52.99 a barrel.
OPEC members Saudi Arabia and Kuwait signaled that the Organization of the Petroleum Exporting Countries and other producers, including Russia, would likely extend their oil output cut beyond June.At a press conference in the United Arab Emirates, Saudi Energy Minister Khalid al-Falih said that “there is consensus building but it’s not done yet.”
James Williams, president of energy consultant WTRG Economics in London, Arkansas, said the minister’s bullish statement did not lift prices much because of growing U.S. shale production. “You would have thought that that would have reversed yesterday’s fall, but it didn’t,” he said. “We’re getting a little bit of price recovery, but it’s still not enough to reverse the shale threat.”
On Wednesday, crude prices tumbled more than 3.5 percent as U.S. government data showed domestic crude stock fell less than expected in the latest week and gasoline stocks posted a surprising 1.5-million-barrel build.U.S. crude oil production rose to 9.25 million barrels per day, official data showed, up almost 10 percent since mid-2016. U.S. inventories of 532 million barrels remained near all-time records reached in March.
At the close of trading, the monthly expiration for May contracts, futures trading was light, with traders afraid to make big bets.“Everything was really shaky today as people are afraid to get in before the expiration,” said Phil Flynn, senior market analyst at Price Futures Group, referring to the four-day losing streak. “There’s hesitation to jump in and catch a falling knife.”
Geopolitical questions loom as the weekend approaches. The presidential election in France begins with a first round of voting on Sunday, and has turned into the most unpredictable French contest in memory.North Korean state media warned the United States of a “super-mighty preemptive strike.” John Saucer, vice president of research and analytics at Mobius Risk Group in Houston, said the market was not jittery, noting low volatility and weak oil prices, which he said doesn’t “really signal a market that’s too concerned about geopolitical hotspots.”