The price for oil has once again gone down on Thursday following a short-lived rebound this week. Market analysts are attributing the swelling of US crude inventories which has now reached at its highest level since December of last year, adding the concerns of a huge global stock surplus although the Organization of the Petroleum Exporting Countries (OPEC) has already hinted on a production cut to offset losses.
According to Reuters, benchmark Brent LCoC1 futures were down by 96 cents in the latest trading, closing at $62.52 per barrel, while it edged back to more than $1 drop in the European trading earlier yesterday.
The US West Texas Intermediate (WTI) crude CLc1 futures plunged down to more than $1 before settling at 78 cents at $53.85 per barrel.
As stipulated by the news agency, trading for black gold was thin due in part to Thursday's Thanksgiving holiday in the United States.
Moreover, as what UBS analyst Giovanni Staunovo said, the oil price decline was also brought in part by the weakening US dollar currency, which makes the greenback-dominated crude market cheaper for other players using other foreign currencies.
Staunovo added that it could also probably be the result from the lowering Iranian crude exports.
In the case of Iran, the newly placed economic sanctions from the US forces the Islamic country to drop its output by several hundred thousand barrels per day for this month alone because of the declining exportation rate, a prominent tanker-tracking company told Reuters on Thursday.
This situation further suggests that the Washington policy may have scared off international crude traders from buying the tagged Iranian crude product.
One evidence of this is South Korea's zero export on sanctioned Iran oil. As reported previously here on Business Times, Seoul was among the entities who were given by the Trump administration with an exemption to buy the said crude products.
The other countries include China, Japan, India, and Taiwan. This leeway allows these Asian nations to purchase a certain amount of Iranian crude at a certain amount of time.
The White House was also carving exemptions on European countries such as Greece, Italy, and Turkey.
Increasing Inventories
The global oil price fluctuations remained dependent on the rise and fall of US crude inventories. As revealed in the latest data from the US Energy Information Administration (EIA), stocks have climbed by 4.9 million barrels to 446.91 million units last week, which was the highest since December.
Meanwhile, the US crude oil production rate remained at 11.7 million barrels per day, the EIA report added.
