Oil dips on oversupply; calls for producer meeting met with scepticism
SINGAPORE : Oil prices fell on Wednesday as a global supply overhang weighed on markets, while talk of a potential producer meeting to discuss propping up prices lent some support but was met with scepticism by analysts.
U.S. West Texas Intermediate crude oil futures CLc1 were trading at $42.43 per barrel at down 34 cents from their last settlement. International Brent crude futures LCOc1 were at $44.62 per barrel, down 36 cents.
Traders said that markets were being weighed down by an ongoing supply overhang in crude and refined fuel products, while a suggested meeting by oil producers was unlikely to result in a significant market tightening.
Venezuelan oil minister Eulogio del Pino said we are actively promoting a meeting of producers, which we estimate could take place in the coming weeks, so that OPEC and non-OPEC countries can sit down to see what the scenario for the winter looks like.
The last time producers met to discuss measure to tighten oil supplies and prop up prices in April, OPEC members were not able to agree on any measures. Analysts said they did not expect more success from a potential future meeting.
In the refining sector, Singapore’s benchmark refining profits dropped to two-year lows on Wednesday in the latest sign that the industry is pumping out too much fuel for the market to absorb leaving storage tanks brimming with unsold fuels.
Asian benchmark Singapore refinery margins DUB-SIN-REF fell to $2.94 per barrel on Wednesday down over 70 percent since January and its lowest level since August 2014.
The glut was triggered by oversupply of gasoline GL92-SIN-CRK and diesel GOSGCKMc1 but it has since spread to light distillates like naphtha NAF-SIN-CRK.
Source : Reuters