Crude prices softens as OPEC-led cuts may be weakened by rising U.S. production

Crude prices

The price of oil traded mixed on Monday’s session. Brent had a hard time to stay on its 50% per barrel handle due to indications that OPEC-led cuts may be hindered by the continues rise of U.S. output

The on-going attempt of OPEC to restrict output as much as 1.8 million barrels per day is beginning to influence the supplies. According to traders, the increases of the production in the United States are weakening the OPEC-led production cuts.

Tanker supplies in OPEC to global consumers came in at 24.3 million barrels per day (bpd) for the month of April, lower compared to the first five month of 2017 of 25.1 million bpd, according to Thomson Reuters Eikon shipping data.

Looking on prices, U.S. West Texas Intermediate futures was only at $47.69 per barrel as it was dragged down the heightened U.S. output, while international benchmark Brent crude futures shortly climbed above the $50 per barrel handle on the day but finished lower at $49.94 per barrel. Crude production in the nation has climbed about 10 percent to 9.34 bpd last year.

The Organization of the Petroleum Exporting Countries (OPEC) exported more than 26.4 million bpd on last year’s fourth quarter. The concerns of traders regarding the high supplies despite the attempts of OPEC have weakened prices.

Australia and New Zealand bank (ANZ) said on the same day that investors are still skeptical regarding the power of OPEC to stabilize the oil market now that the price of crude oil is at gunpoint behind indications that oil production in the U.S. is growing, adding that the release of rig figures is also a contributor.

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