Oil prices down Monday as demand outlook dropped due to a poor Chinese economy survey. However, rumors have it that OPEC could be cutting the output of crude in order to support current oil prices. NYMEX crude CLc1 for June delivery had dropped 12 cents to $49.21 a barrel at 0619 GMT. London Brent crude was down 15 cents at $51.90 for June delivery.
Oil prices have been significantly affected by an unexpectedly rapid slowing down in Chinese April manufacturing growth. A moderation in China PMI has put pressure on general commodity prices.
This makes it three consecutive weeks of oil dropping at the beginning of the week and recovering somewhat as the week went on. High crude stocks have not helped prices. In fact, there has been a global glut of oil supplies for the last several years which has helped prices to remain fairly stable.
Bijan Namdar Zangeneh, Iran’s oil minister, stated Saturday that positive signals for oil output cuts being extended had been given by OPEC and non-OPEC countries, signals which would be backed by Teheran.
With oil prices down again, the oil supply policy will be discussed during this month’s OPEC (The Organization of Petroleum Exporting Countries) meeting. If the price cuts are to be extended by OPEC, then global stocks of crude could be depleted by the end if 2017. Khalid al-Falih, Saudis Arabia’s Energy Minister, commented on Saturday that Central Asia agreed with its policy on production levels and oil markets.
The net long U.S. crude futures and options positions have been cut by money managers for the first time in a month in the week to April 25. This was announced Friday by the CFTC: the U.S. Commodity Futures Trading Commission. What happens next? With oil prices down again, will they recover in the short term or in the longer term?
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