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Oil retreats from 3-month highs as oversupply worries loom

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 14, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Oil benchmarks on both sides of Atlantic halted the recent upward trajectory and corrected slightly lower this Monday as markets continue to weigh headlines over output freeze talks amid omnipresent oversupply worries.

    Oil retreats from 3-month tops

    Currently both crude benchmarks are seen trading subdued, with WTI dropping -0.88% to $ 38.16 while the Brent oil falls -0.32% at $ 40.25. Oil prices dipped in the Asian session today after the oversupply concerns resurfaced into the markets following Goldman Sachs warned that global supply overhang will continue to persist and will eventually drag the prices lower.

    However, the downside remains cushioned amid several favourable factors, including fall in the US rigs count, ongoing output freeze talks and strong oil demand from China. As Reuters reported, China's January-February refinery throughput rose 4.6% compared to the same period a year earlier to 10.59 million bpd, official data showed on Saturday.

    Meanwhile, markets continue to believe that the black gold prices have finally bottomed out this month as open positions betting on price increases stand near record highs. Focus now remains on the crucial Fed statement and the crude reserve reports for fresh direction on the oil prices.
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