Yahoo Finance Crude Oil Remains Weak on Tuesday Morning, May 24
Early Morning Update on Commodities: May 24
Crude oil trading lower on Tuesday morning
Crude oil remained weak in the morning hours of Tuesday, May 24, 2016, after closing with a loss the previous day. At 6:17 AM EDT, WTI crude futures for July delivery were trading at $47.89 per barrel, a drop of 0.4%. Brent crude traded at $48.11 per barrel, a fall of 0.5%.
Sentiment weakens as supply disruptions subside
Recently, the crude oil market sentiment has been supported by the supply disruptions in the Canadian oil fields due to the wildfires, as well as supply outages in Libya, Nigeria, and Venezuela.
The exports in Libya resumed over the weekend through the eastern port of Marsa al-Hariga. The Canadian wildfires moved away from the oil sand fields over the weekend, which allowed some producers to resume their operations.
Crude oil started this week on a weaker note as the major supply disruptions subsided and the market shifted its focus from the supply disruptions to the global supply outlook. The signs of Iran’s output appeared to increase following from remarks made by the country’s deputy oil minister, Rokneddin Javadi. This, along with the steady rig count after eight straight weeks of decline, is weighing on crude oil prices. To learn more about this, please read Market Realist’s Why US Crude Oil Rig Count Was Flat for Week Ended May 20.
The Market is looking forward to the API weekly crude inventory report, which is scheduled to be released at 4:35 pm EDT. Last week, the API reported a drawdown in crude oil inventories of ~1.1 million barrels. According to the preliminary analysts’ poll by Reuters, crude oil stocks may fall by 2.5 million barrels to 538.8 million barrels in the week ended May 20, 2016.
On Tuesday morning, May 24, the stronger dollar also continued to pressure oil prices. The US dollar gained strength due to the increased chances of an interest rate hike in June.
On Monday, May 23, crude oil producers Carrizo Oil and Gas (CRZO) and Canadian Natural Resources (CNQ) rose by 0.03% and ~1.3%, respectively. British Petroleum (BP) and Total SA (TOT) fell by ~1.5% and ~1.1%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) fell by 0.20% on May 23.
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