Oil prices remain steady as investors focus on prospect of tighter supply

Oil prices remained unchanged on Monday, as investors fears of a global economic slowdown were offset by tighter supply and a reduction of US crude inventories.

Oil prices stayed flat on Monday, as investors concerns over the prospect of a global economic downturn were quelled by the promise of a reduction in US crude stockpiles and a tightening of supply across the industry.

Brent crude oil futures rose by just 30 cents to $67.33 a barrel on Monday afternoon, while US West Texas Intermediate (WTI) futures increased by only 11 cents to $59.15 a barrel.

Investors shift focus to US crude inventories

Weekly figures on US oil from the American Petroleum Institute (API) will be released on Tuesday, closely followed by figures from the Energy Information Administration (EIA) on Wednesday.

Oil prices have been supported by the fact that US crude inventories have come down for two consecutive weeks, falling by as much as 10 million barrels in the latest EIA report.

‘The oil market was worried about a global recession, and now we’re kind of shaking that off and thinking that if the U.S. stock market can turn higher, maybe things aren’t so bad,’ Phil Flynn, an analyst at Price Futures Group in Chicago told Reuters.

‘Now we’re focusing on (oil) inventories ... and people aren’t going to want to be short into the inventory report, which is probably going to show another big drawdown.’

OPEC supply cuts provide added support to oil prices

Ongoing supply cuts made by the Organisation of the Petroleum Exporting Countries (OPEC), along with non-OPEC members like Russia have provided added support to oil prices since the start of this year.

In fact, the organisation’s de facto leader, Saudi Arabia, is attempting to push the price of Brent crude to above $70 a barrel.

‘Oil supply fundamentals remain price-constructive with OPEC+ collectively making good progress on pledged supply cuts,’ BNP Paribas strategist Harry Tchilinguirian told the Reuters Global Oil Forum.

‘Oil market-specific reports, which point to tighter supply, are preventing prices from falling any more sharply.’

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.