Oil slid below $67 a barrel as concerns over surging U.S. output reemerged while fears of a Middle East supply crunch waned on speculation that the fallout from a missile strike in Syria may be contained.
Futures slipped as much as 1.1 percent in New York after the number of rigs drilling for crude in the U.S. rose to a three-year high, signaling production may rise from record levels. President Donald Trump declared “mission accomplished” a day after the U.S., France and the U.K. launched military strikes in response to Syrian leader Bashar al-Assad’s suspected chemical attack on civilians, and British Foreign Secretary Boris Johnson insisted that the hit was a one-time move.
Oil last week rose to levels last seen in 2014 amid growing geopolitical risks, with investors anticipating that punishment against Assad would threaten production in the region, while tensions between Saudi Arabia and Iran-backed rebels in Yemen also added to concerns. Still, surging U.S. output continues to weigh on investor sentiment even as the International Energy Agency says the Organization of Petroleum Exporting Countries is close to reaching its target of reducing a global crude glut.
West Texas Intermediate for May delivery fell as much as 75 cents to $66.64 a barrel on the New York Mercantile Exchange before trading at $66.76 as of 11:58 a.m. in Tokyo. The contract closed at $67.39 on Friday, the highest since December 2014, capping an 8.6 percent weekly gain. Total volume traded was more than double the 100-day average.
Brent for June settlement lost as much as 85 cents to $71.73 a barrel on the London-based ICE Futures Europe exchange. The contract climbed 8.2 percent last week. The global benchmark crude traded at a $5.09 premium to June WTI.
Source : Bloomberg