New York, US (BBN) – Crude oil prices fell in Asia on Monday after early gains following a ballistic missile test by North Korea that raised risk sentiment and as investors looked ahead to big names in the energy industry meeting in Houston this week, including the Russian and Saudi energy ministers.
North Korea fired multiple missiles off its east coast, which flew about 1,000 km (620 miles), South Korea’s military said, while Japan said three missiles landed inside its exclusive economic zone and that it would not tolerate the hermit state’s provocative actions, reports
US West Texas Intermediate crude April contract eased 0.24 per cent to $53.20 a barrel, while on the ICE Futures Exchange in London, Brent oil for May delivery slipped 020 per cent to $55.79 a barrel.
Investors are primed for fresh weekly information on US stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer and an annual gathering of global oil producers attending the annual CERAWeek Conference in Houston, Texas, for further evidence that they are complying with their agreement to cut output, including the Russian and Saudi energy ministers, Alexander Novak and Khalid Al-Falih respectively.
Late on Sunday, Organization of Petroleum Exporting Countries (OPEC) Secretary Mohammad Sanusi Barkindo told reporters ahead of the conference in Houston that OPEC will decide in May whether to extend its production deal with non-OPEC members.
Barkindo added that a monitoring committee will meet on March 25.
Last week, oil futures ended higher on Friday, as a broadly weaker US dollar helped prices rebound from a sell-off that took them to multi-week lows in the prior session.
Oil prices typically strengthen when the US currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Uncertainty surrounding Libya’s crude production following reports of violence near the war-torn country’s biggest oil terminal also provided support.
Prices, however, still ended with a weekly loss as concern over rising shale production and record-high US crude inventories offset optimism that OPEC and its allies have been following through on their commitment to cut production.
Concerns that the ongoing rebound in US shale production could derail efforts by other major producers to rebalance global oil supply and demand pressured crude prices.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active US rigs drilling for oil rose by 7 last week, the seventh weekly increase in a row.
That brought the total count to 609, the most since October 2015.
Meanwhile, the US Energy Information Administration said on Wednesday that crude supplies increased by 1.5 million barrels last week to yet another all-time high of 520.2 million.
It was the eighth straight weekly build in US stockpiles, feeding concerns about a global glut.
Oil prices have been trading in a narrow $5 range around the mid-$50s over the past two months as sentiment in oil markets has been torn between rising stockpiles and increased shale production in the US and hopes that oversupply may be curbed by output cuts announced by major global producers.
OPEC and non-OPEC countries have made a strong start to lowering their oil output by almost 1.8 million barrels per day by the end of June, with compliance currently at around 94 per cent.