Shale oil output dips

Shale oil output dips

The oil market remained oversupplied on Tuesday, but net prices have increased as the United States’s shale oil output decreased more than expected since last four years. U.S. crude oil increased by 63 cents and reached $52.54 per barrel and Front-month Brent crude futures were selling it at $58.45 a barrel, sharp 52 cents rise around 0332 GMT. The U.S. shale production will fall around 45,000 barrels to 4.98 million barrels per day during April and May, according to the estimate by the U.S. Energy Information Administration. The organization is responsible for analyzing the energy information for sound policy decisions.

The same U.S. shale oil wave, which oversupplied market years ago resulted in the price drop around 60 percent. The month of June resulted in the highest oversupply by the U.S. in the crude oil market. Looks like the shale oil boom is over now and the market is now reaching to its equilibrium. The high global production and stocks are contributing to the low stable oil prices, according to the analysts. The political instability in the oil rich regions of the Middle East is now contributing to the increase in prices.

The supply of the traditional crude oil providers like the Middle Eastern nations will always remain high with Iraq and Saudi Arabia leading the list. The geopolitical risks in the crude oil market will be high. The JP Morgan, investment banking giant informed the above in a press statement. The statistics on the Chinese economy are all set to be released on coming Thursday. The nation is experiencing slowest economic growth since last 25 years, which is going to impact oil prices.

 

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