EIA Slashes Crude Oil Demand Forecast

Samuel SharpFeb 08, 2017

West Texas Intermediate for March delivery fell 84 cents to $US52.17 a barrel on the New York Mercantile Exchange. Statoil ASA said it would make another US$1 billion (RM4.4 billion) of cost cuts this year after posting a surprise loss, while BP Plc said it still needs to borrow money to cover spending and dividends at current oil prices. Overall, WTI dipped to 3-week lows below $52.00 p/b before finding some support into the U.S. close. At 1:53 pm GMT, the Comex gold futures contract for February delivery was 0.31% or $3.80 higher at $1,235.90 an ounce.

Crude oil prices settled sharply lower in futures market on Monday as a stronger dollar and ample US supplies outweighed OPEC output curbs and rising tensions between the United States and Iran.

Oil prices remained stable as lower crude production from OPEC countries balanced the increase in United States shale production.

Analysts at Rittberbusch & Associates cited "a vastly oversupplied gasoline market as providing major downward pull on crude values". Stockpiles are at 494.8 million barrels, the highest seasonal level in more than three decades, according to weekly data compiled by the EIA since 1982. The global benchmark traded at a premium of US$2.08 to April WTI.

The trading boom that cushioned the profits of Royal Dutch Shell Plc and BP through the price slump appears to be over.


The British oil and gas company, whose fourth quarter profits fell short of street expectations, had previously targeted a breakeven oil price of $50-55 a barrel.

Since the beginning of 2017, the prices of oil swayed in both directions within a $5 per barrel price range, implying not enough strong momentum in the global crude market.

BP raised the oil price at which it can balance its books this year to $60 a barrel yesterday due to higher spending following a string of investments as annual earnings fell for a second consecutive year. The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose 0.3 per cent.

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