Energy - - Mar 06,2017
On Monday, oil prices dropped in Asian trade, washing away the gains experienced in the previous session; Russia’s output for February showed no signs of change from its January output.
Presently, the surrounding worries connected to lower growth targets in China might trim oil demand.
Also, the ongoing concern over Russia's agreement with a global deal to reduce Russian output has resulted in oil prices dip.
As of 0459 GMT, Brent crude futures dipped 20 cents to $55.70 a barrel after holding 1.5 percent higher in the previous session.
Moreover, U.S. West Texas Intermediate (WTI) crude futures dropped 23 cents to $53.10 a barrel, with its previous session closing at a 1.4 percent higher stage.
According to Jeffrey Halley, senior market strategist at Oanda brokerage, the primary drag affecting markets at present is the “lowering of growth targets by China”. He also blamed the strict regulatory controls which have caused “less demand for oil and commodities”.
China aims to expand its economy with an expectation of 6.5 percent in the present year. However, this figure is lower as compared to the 6.7 growth acquired in the previous year.
On the other hand, doubts over Russia’s attempts to curb output as per the pact with oil producers is also an issue. According to last week’s figures by Russia’s energy ministry, February oil output was similar to January fixed at 11.11 million barrels per day (bpd).
On Friday, after a speech by U.S. Federal Reserve Chair Janet Yellen suggesting a rate increase which might be introduced on March 15 led to a modest weakening of the dollar.
Moreover, increasing supply disruptions in the Middle East offered significant support to crude oil prices, according to ANZ.