Oil Holds Biggest Decline in Three Weeks With Glut in Focus

Commodity

Summary:

Oil stabilizes after its sharpest drop in weeks as traders await key agency reports on a growing global surplus. Rising seaborne supply pressures prices, with U.S. sanctions on Russian firms helping prevent a deeper Brent decline.

Oil steadied after the biggest drop this month as traders look to reports coming this week to assess the extent of an oversupply.

Brent crude traded held above $62 a barrel after tumbling 2% on Monday. The Energy Information Administration is set to release its Short-Term Energy Outlook on Tuesday, with reports due from the International Energy Agency and OPEC later this week.

The IEA has predicted a record surplus next year, and the volume of oil sailing the oceans is rising. Prices for refined fuels have softened in recent days, removing one factor that has supported crude during the last few weeks. Still, Brent ultimately remains in the tight $4-a-barrel range it has traded in since the start of November.

“Eventually, the current huge blob of oil at sea will move onshore where the sensation of rising crude oil stocks will be more tangible,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “The only reason why Brent crude hasn’t fallen faster and deeper is because of the US sanctions related to Rosneft and Lukoil.”

Source: Bloomberg

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Oil Holds Biggest Decline in Three Weeks With Glut in Focus

Source: Bloomberg

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