Brent crude oil price slides on abundant US output, but supply cuts limit decline

Oil markets edged lower on Thursday as US inventories remained strong, but OPEC led supply cuts helped limit the slide.

Oil prices fell on Thursday morning even with US stockpiles seeing a slight reduction, with OPEC-led production cuts helping to stop the commodity from sliding too far.

Brent crude futures sat at $71.43 a barrel at 7:00am GMT, down 19 cents, representing a 0.3% decline and falling away from Wednesday’s five-month high of $72.27 a barrel.

Meanwhile, US West Texas Intermediate (WTI) futures also fell, sliding 0.2% to hit $63.62 a barrel.

Brent oil today: price chart

US crude inventories fall

The slide in oil price is surprising, considering that US crude inventories declined by 1.4 million barrels in the week to April 12, according to data released by the US Department of Energy on Wednesday. Analysts initially were expecting a 1.7 million barrel increase.

“The unexpected drawdown in U.S. commercial crude oil stocks was balanced by lower-than-expected withdrawals in the country’s gasoline and distillate inventories,” Abhishek Kumar, head of analytics at Interfax Energy in London told Reuters.

OPEC-led supply cuts limit oils price from sliding further

Despite the decline in oil prices, the commodity has continued to find support this year from OPEC-led supply cuts that were agree in 2018 and came into effect in January, with exporters agreeing to limit their output by 1.2 million barrels a day.

Global supply has been further reigned in by US-led sanctions on key oil producers like Venezuela and Iran.

However, growing US output and the ongoing uncertainty created by the US-China trade war is stopping oil prices from surging higher.

‘A persistent rise in U.S. oil output, together with lingering demand-side concerns emerging from the U.S.-China trade dispute, is limiting price gains,’ Kumar added.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

European Central Bank meeting

Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement on 24 October 2019.

  • How might the next meeting affect the markets?
  • What are the key rate decisions to watch?
  • Why is the Governing Council announcement important for traders?

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.