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MTECHTIPS:-Crude futures fall sharply, amid dwindling production forecasts for 2016

MTECHTIPS:-Crude futures fall sharply, amid dwindling production forecasts for 2016

Crude futures fell sharply on Monday extending their severe downturn in recent months, as investors continued to digest market-moving comments from the International Energy Agency late last week on dwindling U.S. production. On the New York Mercantile Exchange, WTI crude for October delivery wavered between $43.60 and $44.97 a barrel, before closing at $44.07, down 0.56 or 1.19% on the session. Trading remained volatile, as U.S. crude futures closed by more than 1% in either a positive or negative direction for the sixth consecutive session. Texas Long Sweet futures are still up by more than 5% since touching down to six and a half year lows earlier last month. The losses, however, were not as sharp as the sell-off on international energy markets during Monday’s session. On the Intercontinental Exchange (ICE), brent crude for October delivery traded in a broad range between $47.30 and $49.27, before settling at $47.41, down 1.63 or 3.32% on the day. The spread between the international and U.S. domestic benchmarks for crude stood at $3.34, below Friday’s level of $3.48 at the close of trading. On Friday, the IEA, a Paris-based agency, downgraded its forecast for U.S. production next year, citing the wide-ranging impact of Saudi Arabia’s strategic policy aimed at undercutting shale driller in the U.S. In 2016, the IEA predicts that U.S. shale production will fall by 400,000 barrels per day, significantly below OPEC estimates of a 50,000 bpd increase. The IEA is regarded by many experts in the industry as one of the world’s foremost providers of statistics and analysis on global energy.


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