Oil futures finished higher on Monday, recouping much of the losses seen at the end of last week, as traders weighed the likelihood of a slowdown in production and took their positions for the expiration of the April contracts for West Texas Intermediate crude.
Prices had been seesawing between losses and gains before getting a more solid boost after data from market intelligence firm Genscape reportedly showed that stockpiles at the crude storage hub of Cushing, Okla., fell by 570,574 barrels last week. That may “add a bit of breathing room for storage levels there,” said Robbie Fraser.
Don’t bet on a rapid recovery for oil prices
Gains for oil this week were impressive, but Friday’s slump in crude has helped support skeptics’ view that crude’s rocket rise isn’t sustainable.
The “crash” in oil prices was “linear, but the recovery will not be,” said analysts
“Signs of lower production in recent months are encouraging the bulls to believe that rebalancing in the oil market is under way,”
OPEC oil output falls 90,000 barrels a day in February
Oil production from the Organization of the Petroleum Exporting Countries fell by 90,000 barrels a day in February from a month earlier, to 32.34 million barrels a day, according to a Platts survey of OPEC and oil industry officials and analysts released late Tuesday. Platts attributed the decline, in part, to a drop of 200,000 barrels a day to 4.13 million barrels a day in Iraqi output due to the closure of a key pipeline. The Saudis kept output at 10.2 million barrels per day, while Iran raised production by 210,000 barrels a day to 3.12 million.
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