Oil sinks to its lowest level since November
- Author: Ronnie Bowen May 06, 2017,
May 06, 2017, 2:20
"The two ministers expressed their satisfaction with the market fundamentals evidenced by the gradual drawdown of global inventories and agreed on the need to continue working with all participants to guide oil markets towards rebalancing", he said.
Shale drillers on Thursday paid the price for pouring more and more oil onto global markets.
"US production will grow, though likely not as strongly as many people are expecting".
Oil's retreat stoked declines in other commodities from iron ore to industrial metals.
The OPEC agreement, the cartel's first cut since 2008, was supposed to prop up oil prices and end the epic glut that has roiled the industry. Brent, the London-traded contract against which most of the world's crude is priced, closed below $50 for the first time since November 29. US crude fell as low as $45.39, Brent touched $48.32.
The Russian ruble, which has historically closely tracked oil prices, also tumbled on Thursday.
Australia's ASX200 share index was down 0.8%, weighed by the mining and resource sectors, while the Hang Seng was off 1.25%.
Saturday Weather Outlook: Cooler With Thunderstorms
We're still looking at mostly dry conditions, but an isolated shower or storm is not out of the question. Forecasters say Friday should be mostly sunny throughout the mid-valley, with highs around 60.
When the system isn't clogged, oil simply goes through or out of Malaysia to Asia's big consumers in China, Japan or South Korea. Wall Street was poised to open slightly higher.
The Canadian dollar closed at 72.76 cents USA, down from 72.92 cents United States on Wednesday. It is now buying US73.75c, down from US74.27c.
What to watch The US non-farm payrolls report will be published on Friday at 13:30 BST, and investors will be keen to see if it supports expectations that US interest rates are set to rise again next month.
Advisors were among those liquidating their contracts in the day, traders said.
"While the cartel is expected to extend a self-imposed production cap by another six months, it will be a challenge to convince several non-OPEC members to follow suit", said Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics, "Persistent growth in U.S. oil production. will also make extensions of the OPEC cap beyond 2017 unlikely".
"At some point, the market should recognize OPEC isn't the most important player in the market any more", said Commerzbank's Eugen Weinberg, "That is non-OPEC, and, above all, US shale".
There was also a sign of slowing energy demand in China, the world's second largest oil consumer, when a survey showed growth in that country's services sector in April was at its slowest in nearly a year.
"The energy complex is slowly succumbing to an opinion that this year's OPEC production cuts have been ineffective", Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.