Oil Prices Drop despite Lingering Concerns over Supply Disruptions.

Catogory : Market Report

International oil prices are on the retreat after the Brent benchmark hit a new five-month high over the weekend. Pessimistic projections of slowing global economic growth are seen as weighing on fuel prices worldwide as experts forecast modest demand over the next few months, but supply constraints could offset the demand woes, supporting prices in the medium-term. Brent oil benchmarks inched lower in London , having dropped 0.1 percent to $71.46/bbl, while US oil retreated 0.4 percent to $63.63 overnight. ,OPEC pipeline infrastructure and shipments, which would support prices at their current levels. However, an ongoing cooling of manufacturing activity in Germany and across the Eurozone, a moderation in US economic growth, along with the risks posed by Brexit and international trade tensions have put downward pressure on oil. Oil prices are currently up more than 30 percent year-to-date due to the output cuts put in place by OPEC and Russia, steady demand from China, and expectations of higher demand in the US ahead of the summer driving season.US oil prices have risen by 41 percent since the beginning of this year due to the lack of pipeline infrastructure and underperforming oil refining rendering petrol prices higher as well. UK oil is up 32 percent over the same period. However, the US has continued to increase its oil output, supported by high prices. Last week, US drillers commissioned 15 new oil rigs, and added two more this week already. Additionally, the Energy Information Administration (EIA) said, US production hit a new high last week at 12.2 mln bpd.