Investing.com - Financial Markets Worldwide

Oil prices fall on dimming prospect of output restraint

Published 2016-04-03, 08:27 p/m
© Reuters. Oil prices fall on dimming prospect of output restraint
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SINGAPORE, April 4 (Reuters) - Oil prices slipped in early
trading on Monday as the chances fell of Middle East producers
agreeing to restrain overproduction, while U.S. output has
remained stubbornly high despite spiralling debt levels and
bankruptcies.
Front month U.S. West Texas Intermediate (WTI) crude futures
CLc1 were trading at $36.23 per barrel at 0014 GMT, down over
half a dollar from their last settlement.
International Brent futures LCOc1 were down 45 cents at
$38.22 a barrel.
The falls extended a 4 percent tumble on Friday when Saudi
Arabia said it would only participate in a global freeze of its
output if its rival Iran also took part, something Tehran has so
far dismissed.
Adding to concerns of a global glut which has pulled down
prices by as much as 70 percent since 2014, U.S. production has
remained stubbornly high despite steep cuts in drilling for new
reserves as well as a jump in bankruptcies.
"In the U.S., rigs targeting oil production declined by 10
to stand at 362 active rigs (last week)," ANZ bank said.
Yet despite the ongoing decline in the rig count, U.S.
production has remained stubbornly high as bankruptcies are so
far having little effect on overall output while operators keep
their oil wells gushing in a struggle to service debt and stay
alive.
Reflecting a spreading belief that crude prices might not
recover by much any time soon, hedge funds have cut their net
long postitions which would benefit from further price rises in
WTI futures for the first time in six weeks.

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