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COVERNEWSLETTEROIL & GAS

Oil Price Slumps to $47.20/barrel on Intense Profit-taking

Oil
Oil prices tumbled in Asian trade on Tuesday, September 27, as investors took profits after prices climbed more than 3 percent in the previous session.

Brent crude futures slipped 15 cents to $47.20 a barrel as of 0346 GMT after closing up $1.46, or 3.2 percent in the previous session, CNBC reports.

U.S. West Texas Intermediate (WTI) crude fell 6 cents to $45.87 a barrel, after rising $1.45, or 3.3 percent, in the previous session.

The dollar was also weighing on oil prices after rising against a basket of currencies, suggesting markets were judging Democrat Hillary Clinton as the winner in the first U.S. presidential debate with Republican candidate Donald Trump.

A stronger greenback makes commodities like crude that trade on a dollar basis more expensive for consumers that pay in other currencies.

Expectations of a build in U.S. crude stockpiles last week, according to a Reuters poll, also pressured prices amid concerns of a global oversupply.

Major oil producers are gathering in Algeria for a three-day meeting that could see moves to cut or freeze oil output in an effort to support oil prices.

The Organisation of the Petroleum Exporting Countries, OPEC and other oil producers led by Russia are meeting informally on the sidelines of the International Energy Forum in Algeria from Sept. 26-28.

However markets remained skeptical that producers would reach a deal, said Michael McCarthy, chief market strategist at Sydney’s CMC Markets.

The reversal in oil prices during the Asian time zone on Tuesday meant investors were generally profit-taking, McCarthy said.

U.S. commercial crude oil stocks likely rose by an average of 2.8 million barrels to 507.4 million barrels in the week to Sept. 23, reversing three weeks of unexpected drawdowns, a Reuters poll of seven analysts showed.

 

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