Tuesday, weighed by abundant supply by OPEC and other major world oil manufacturers, the rampaging price of oil fell at 2% after achieving a boost that made oil touched a massive two-month high. Brent crude futures traded at $51.78 per barrel, which is down by 1.8% or 94 cents. The United States West Texas Intermediate on the other hand, trade at $49.16, down by 2% or $1.01.
The lavish supply produced by major world oil producers that made oil prices sank, caused investors to worry that several weeks of steady profits had pushed the rally, abruptly. In accordance to this, the OPEC—or the Organization of Petroleum Exporting Countries’ production—based on survey found on Monday, had rose in July; this is despite their ongoing pledge to cut supply.
Oil supply by the Organization of Petroleum Exporting Countries rose on July by 90,000 barrels per day up to a 2017 high, which is led by one of OPEC’s exempt oil producers: Libya.
Phil Flynn, analyst at Price Futures Group in Chicago said that in the recent situation, it seems to be more technical and a combination of that and the Organization of Petroleum Exporting Countries story has everybody running for exits at the same time. With the recent fall of oil after gaining two-month highs, Mizuho Americas’ director of energy: Robert Yawger said that momentum indicators have them in overbought territory over the last few days, and that is telling that oil is going to pull back somehow.