Oil drops 3% as oversupply worries return

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 2, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - Oil benchmarks on both sides of Atlantic continued its bearish momentum for the second straight session and fell to fresh four-day lows as supply glut concerns return to markets.

    Oil awaits inventory reports from API & EIA

    Currently, WTI drops -3.18% to 30.62, while the Brent oil falls -2.80% to 33.26, with the US oil inching closer towards the key $ 30 mark. Oil prices dived deeper into the red in Europe as investors’ sentiment was dampened on huge oversupply concerns and on slowing global oil demand, especially with mounting China slowdown fears.

    The upcoming crude reserves reports from both API and EIA are expected to show rise in inventory levels, which again will add to the already oversupplied oil markets and weigh further on the prices. For the EIA data due tomorrow, markets are predicting a rise of about 3.75 million barrels in US crude inventories.

    Moreover, fading bets over OPEC and Russian production cut deal also continues to undermine the black gold, while markets are now unresponsive to the Russian chatter around output cuts.

    Focus now remains on the developments surrounding oil markets, while the US employment data due later this week will be also closely eyed for any impact on the dollar-denominated oil.
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