Oil Pulls Back on Latest Reports

Oil prices fell below $50 per barrel on Wednesday morning after reports on Tuesday showed an increase in supplies from OPEC and a rise in crude stockpiles in the United States .  The American Petroleum Institute announced late on Tuesday that U.S. crude inventories rose by 1.8 million barrels last week, to 488.8 million.  Other reports this week indicated that OPEC’s production hit a 2017 high of 33 million barrels per day, despite the group’s commitment to restricting production which is currently in effect.

U.S. WTI futures were down 0.67 percent as of 9:54 a.m. HK/SIN, to $48.83 per barrel.  Brent held above the $50 mark, trading at $51.47 per barrel.  Although some analysts expect that the global oversupply could last at least five years and could weigh on prices during that time, others believe that an unexpected political or weather-related event could easily reduce the supply glut that has been plaguing oil prices.

The dollar was trading fairly evenly at the start of Wednesday’s Asian session after U.S. factory activity retreated from July’s three-year high after new orders and consumer spending slowed considerably.  The motor vehicle industry lead the slowdown, posting decreased output for the last three quarters.  The slowdown raised questions about the potential for growth in the third quarter.  The euro was at $1.1799, a 0.03 percent decrease, while the dollar gained modestly against the yen to trade at 110.54.  The dollar index bounced back from 15-month lows to 93.134 .DXY.

Sara Patterson
Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.