Oil further falls despite OPEC cuts
24 June, 2017
Crude price went down last week and was set for its largest price slide in the first half of any year for the past two decades, as investors discounted evidence of strong compliance by major producers with a deal to cut global output, news wires reported. August Brent crude futures were last Wednesday at $46.02 a barrel, having fallen earlier to seven-month lows. US crude futures for August delivery were up 4 cents at $43.55, having hit their lowest since September last Tuesday.
So far this year, oil has lost 20% in value, its worst performance for the first six months of the year since 1997. Compliance with an agreement by the OPEC and other producers to cut output by 1.8 million barrels per day from January reached its highest in May since the curbs were agreed last year. OPEC compliance with the curbs was 108%, while non-OPEC compliance was 100%, according to an industry source.
“The slide in oil prices seems to be unstoppable,” said Julius Baer commodities research analyst Carsten Menke cited by Reuters.. “The supply deal's effectiveness is increasingly questioned. We believe that downside risks to oil prices from a disorderly and early unwinding have risen.