Oil prices drop amid high USA output

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enewspaper.com.pk
enewspaper.com.pk

Oil prices fell with the focus on high US output as traders looked ahead to Greece weekend referendum that could determine whether it remains in the euro zone.

West Texas Intermediate for August delivery fell 35 cents to $56.58 a barrel compared with Thursday close.

Brent North Sea crude for August dropped 44 cents to stand at $61.63 a barrel in London afternoon deals.

Traders are worried about a global supply glut and the first rise in the US oil-rig count this year.

Oil prices had meanwhile slumped midweek as the USA Government revealed a surprise weekly build of 2.4 million barrels for the country s commercial crude inventories.

“This was the first build in stockpiles since the end of April, ending a run of eight weekly declines,” said Fawad Razaqzada, technical analyst at Forex.com.

Saxo Bank analyst Ole Hansen added that the USA situation combined with “OPEC producing the most since 2012, leaves the upside potential for crude oil (prices) still very limited”.

There are concerns also over a return to the market of Iranian crude.

Talks between six world powers and Iran aimed at curbing the country nuclear ambitions were this week handed a deadline extension to July 7.

Iran rejects allegations that it has been seeking to develop nuclear arms, and has resisted moves to give the International Atomic Energy Agency unbridled access to sensitive military sites to verify its claims.

Successful outcome of the talks could see the lifting of sanctions that have forced the country to cut by half its oil exports.

The Greece situation has meanwhile weighed on the euro this week, making dollar denominated crude more expensive for holders of the single currency.