Egypt achieves record primary budget surplus of EGP 629bn despite sharp fall in Suez Canal revenues    Escalation in Gaza, West Bank as Israeli strikes continue amid mounting international criticism    Egypt recovers collection of ancient artefacts from Netherlands    Resumption of production at El Nasr marks strategic step towards localising automotive industry: El-Shimy    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, UNDP discuss outcomes of joint projects, future environmental cooperation    United Bank achieves EGP 1.51bn net profit in H1 2025, up 26.9% year-on-year    After Putin summit, Trump says peace deal is best way to end Ukraine war    Jordan condemns Israeli PM remarks on 'Greater Israel'    Egypt's Supreme Energy Council reviews power supply plans for 14 industrial projects    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egypt's FM discusses Gaza, bilateral ties in calls with Saudi, South African counterparts    Egypt prepares to tackle seasonal air pollution in Nile Delta    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egyptian pound closes high vs. USD on Tuesday – CBE    Egypt, Colombia discuss medical support for Palestinians injured in Gaza    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt's govt. issues licensing controls for used cooking oil activities    Egypt to inaugurate Grand Egyptian Museum on 1 November    Egypt's Sisi: Egypt is gateway for aid to Gaza, not displacement    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







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Oil Prices Remain Low on Equity Market Rout, Commodity Slump
Published in Amwal Al Ghad on 29 - 09 - 2015

Oil prices struggled to recover in Asian trade Tuesday, after falling sharply overnight due to bearish sentiment following weakness in equities and commodities markets.
The oil market got some support from expectations that the long-awaited decline in U.S. oil production has begun, but uncertainty about oil production from the Middle East, Iran's return to the market and U.S. monetary policy are keeping investors on edge.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $44.43 a barrel at 0430 GMT, unchanged in the Globex electronic session. November Brent crude on London's ICE Futures exchange fell $0.01 to $47.33 a barrel.
Oil prices had slipped in the previous session, with Nymex crude losing 2.8% and Brent crude losing 2.6%, snapping their two-session winning streaks. Benchmark crude prices are still down by more than half from a year ago, but price swings in the last couple of weeks have eased from the turbulence seen in August.
Asian equity markets declined across the board Tuesday, after U.S. stocks tumbled overnight, after the sharp drop in China's industrial profit in August triggered fresh fears over China's slowdown. Hong Kong's Hang Seng Index was last down 3.6% and the Shanghai Composite Index was off 1.8%.
Bearish sentiment from falling equity markets has spilled over to oil, but oil prices should maintain their price supports of $44.27 a barrel for WTI crude and $47.29 a barrel for Brent, unless supply-demand fundamentals worsen, said Daniel Ang, an analyst at Phillip Futures.
The overall slump in the commodities complex also weighed on sentiment in the oil market. Prices of key commodities like base metals were driven lower by China concerns, and after shares of mining giant Glencore PLC tanked more than 29% to an all-time low.
However, a key bullish development for oil prices appears to be gathering pace--the decline in U.S. oil production in response to low prices.
"We think that the next key milestones in the decline of U.S. crude oil output are about to be passed ... when output falls below 9 million barrels a day, and when year-on-year declines commence," said Paul Horsnell, head of commodities research at Standard Chartered Bank.
"Our forecast is that both events will happen in October," he said.
U.S. oil production has already started to fall sequentially following April's peak of 9.61 million barrels a day, and lower price expectations and deteriorating credit conditions are likely to keep U.S. oil drilling activity low, he said. Later Tuesday, industry numbers on U.S. oil inventories will be closely watched.
Also, there is evidence that oil majors are pulling back from large projects, with Royal Dutch Shell PLC ending its controversial Arctic drilling campaign.
Nymex reformulated gasoline blendstock for October--the benchmark gasoline contract--fell 30 points to $1.3458 a gallon, while October diesel traded at $1.4779, 7 points higher.
ICE gasoil for October changed hands at $456.00 a metric ton, down $0.50 from Monday's settlement.
Source: Wall Street Journal


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