Oil prices edge lower from last week’s gains
Brent crude oil futures were at US$71.40 at 7.15am Greenwich mean time, down 15 US cents or 0.21%, from the last close. Last week Brent reached five-month high prices at a high of US$71.87 a barrel.
Oil prices dipped on Monday, coming off from the five-month highs in earlier sessions last week caused by Libya’s ongoing strife.
Brent crude oil futures were at US$71.40 at 7.15am Greenwich mean time, down 15 US cents or 0.21%, from the last close. Last week Brent reached five-month high prices at a high of US$71.87 a barrel.
United States (US) West Texas Intermediate (WTI) crude futures were at US$63.55, down 21 US cents or 0.33% lower. WTI prices rose to hit US$67.70 levels last week.
Oil prices soared higher last week on expectation of tightened global supplies due to the fighting in North African Libya, as well as the ongoing supply cuts from the Organization of the Petroleum Exporting Countries (Opec) and sanctions from the US against Iran and Venezuela.
The fighting in Libya could cause crude production in the country to be wiped out, the head of Libya’s National Oil Corp cautioned, news outlets reported on Friday.
Read more on Oil prices soar higher as Libyan unrest threatens output.
Brent has gained 30% this year, while WTI has risen almost 40%, supported by rising global demand, production cuts from Opec and the US sanctions on Iran and Venezuela.
In June, the Opec and its allies will meet to decide if they wish to continue to withhold supply. The Opec has pledged to withhold around 1.2 million barrels per day of oil supply since the start of this year.
It is said that Opec’s leader Saudi Arabia is keen to continue on the output cuts, but the disruptions to oil elsewhere may cause the group to raise their supply.
High oil prices hurting demand: IEA
Not all stakeholders are pleased with the higher oil prices, and some are saying that it would threaten to soften the demand for oil.
The world’s biggest oil consumers – China, US, and India – are feeling the pinch on the high prices of oil, and the recent ramp-up in oil prices is weighing on demand, suggests the International Energy Agency’s (IEA) executive director Fatih Birol in an interview with S&P Global Platts.
‘The higher oil price environment may, if they stay around this level, also have an impact...put some downward pressure under demand growth,’ Mr Birol said.
On top of those concerns, geopolitical uncertainties in countries such as Venezuela, Iran, Libya and Algeria are concurrently making him "nervous," Mr Birol added.
‘Some developments in these countries [have] implications [for] oil markets and this may well push prices up if such developments occurred,’ Mr Birol said.
In its latest monthly oil market report released last week, the IEA kept its estimates for global oil demand growth in 2019 unchanged at 1.4 million barrels per day, up from 1.3 million barrels per day in 2018.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
React to volatility on commodity markets
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
See opportunity on a commodity?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a commodity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Analyse and deal seamlessly on fast, intuitive charts
- Get spreads from just 0.3 points on Spot Gold
- See and react to breaking news in-platform
See opportunity on a commodity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
