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US Crude Struggles to Stay atop $50

October 18, 2016 at 17:20 by Andrew Moran

US crude is trading in positive territory on Tuesday, but it is struggling to stay above the important $50 threshold. With a surging dollar and a new report warning that the oil industry needs trillions of dollars to meet global demand, US and Brent crude are struggling to remain at $50.

November West Texas Intermediate crude rose just $0.10, or 0.20%, to $50.04 per barrel at 16:55 GMT on the New York Mercantile Exchange. US crude has consistently traded above the crucial $50 threshold ever since members of the Organization of the Petroleum Exporting Countries (OPEC) agreed to limit oil output levels.

December Brent crude tumbled $0.06, or 0.12%, to $51.46 a barrel on London’s ICE Futures exchange. Brent has been performing well since the informal OPEC meeting in Algiers late last month.

Ever since hitting a 12-year low in February, oil has recovered more than 70%.

Oil prices are having a hard time staying above $50 after the greenback surged during the Tuesday morning trading session. This offset a bullish outlook by OPEC that would see the oil cartel reach an agreement that would satisfy all 14 members. A stronger dollar makes oil and other commodities more expensive for foreign investors.

Brent and US crude were also impacted on a new OPEC report that found trillions of dollars will be needed over the next 20 years. Speaking at an “Oil & Money” conference in London on Tuesday, OPEC Secretary-General Mohammed Barkindo said that the recent oil crash has negatively affected the oil industry, especially the exploration-and-production sector.

How much do oil nations need to inject into the system? Approximately $10 trillion until 2040.

According to our world oil outlook report that will be officially released next month in Abu Dhabi, we estimate that by 2040 this industry will need in the region of $10 trillion dollars of investment in order to sustain production as well as supply.

It affects all of us. Hence the need to restore balance in this market and to restore investments on a sustainable basis.

Late last month, OPEC agreed to cap oil production at 33 million barrels per day (bpd).

If you have any questions and comments on the commodities today, use the form below to reply.

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