Published on : Sep 29, 2015
Prices of oil went up on Tuesday amidst expectations that the upcoming data will reveal an increased slowing of the growth in US oil production, in spite of the fact that global economic headwinds could put pressure on the demand.
The US Energy Information Administration is likely to unveil its major report on Wednesday, updating its evaluation of the regional oil output. Initial indications are that the oil production in the United States has started to taper off at a time of a rare global situation of oversupply that has been gaining strength over the year. Analysts as well as traders are staying observant for any new information that will shed light on exactly how far it has dropped off.
Be that as it may, other leading producers from Russia to the Organization of the Petroleum Exporting Countries continue to supply oil at a rapid speed with the aim of defending their share in the market. Recent estimates by analysts have revealed that global supplies of oil will continue to rise at a rate of an estimated 1 million barrels per day more than what is being consumed.
An analyst at Deutsche Bank stated in a report that the crude oil production in the US has started turning lower at a much sharper rate than the company has earlier anticipated, making it a possibility that production growth in non Organization of the Petroleum Exporting Countries will shift from a path of expansion to one of contraction the next year for the first time since the year 2008. Nevertheless, the company estimates that the oil market will continue to be oversupplied next year as well.
The US benchmark oil contract rose by 1.7 per cent or 75 cents to reach US$ 45.18 per barrel on the New York Mercantile Exchange. The global benchmark Brent gained 1.85 per cent or 87 cents to reach US$ 48.88 per barrel on the ICE Futures Europe