U.S. crude biggest slump since November, closing in at $49.28

US crude biggest slump

U.S. crude inventories had some hesitations about whether the OPEC-led supply cuts would lessen a global surplus. The price of oil plummeted by 2 percent driven by the current sessions dip that made prices to their lowest levels on Thursday.

Brent crude oil edged down 1.9 percent, or $1.02 at $52.09 per barrel as of 2:39 p.m. ET, this is after reaching a weakening of $51.50 in a single day, considered the lowest since November 30. Last Wednesday, Brent crude oil dropped by 5 percent or $2.81 per barrel, considered as their biggest daily price move this year. 

U.S. light crude was as its weakest level by closing down 2 percent, or $1 at $49.28, after dropping 5.38 percent on Wednesday.

The price of U.S. crude deteriorated through the $50 per barrel support level. All participants of the market loose up some of its biggest bullish wagers they had assembled right after a pack by major global oil producers to restraint output.

After statistics showed U.S. crude stocks, the world’s major oil consumer, bloated by 8.2 million barrels just last week to a record of 528.4 million barrels. This growth beats expectation for a 2 million barrel build. However, this Wednesday’s decline was followed by a 5 percent lows.

Other exporters and OPEC itself agreed to reduce output almost 1.8 million barrels per day (bpd) in the first half of 2017 this November but the drilling in U.S. has picked up. Major producers are ought to broaden crude production in Oklahoma, North Dakota and other shale states. America’s biggest oilfield the Permian, has witnessed the output jump.

This week, Khalid al-Falih, Saudi’s Oil Minister, stated that market fundamentals might be improving but OPEC would not allow its opposing producers to take advantage of the cuts.

Kuwait is scheduled to host a conference between OPEC and non-OPEC ministers on March to analyse conformity regarding the production cuts.

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