Monday, July 25, 2016

US crude has dropped sharply on Monday

US crude has dropped sharply on Monday, continuing the downward trend seen late last week. In the North American session, WTI/USD futures are trading at $43.19. Brent crude is trading at $44.80, as the Brent premium stands at $1.59. It’s a quiet start to the trading week, with no US releases on the schedule. On Tuesday, there are two key releases, CB Consumer Confidence and New Home Sales.
Crude prices continue to slide. WTI/USD has plunged 4.9% since Wednesday, dropping close to the $43 level. US crude inventory reports continue to point to declines week after week, but crude prices haven’t rebounded, due to the oversupply of crude. Drilling activity in the US is on the upswing, as the number of US drilling rigs continues to increase. This is raising concerns that higher production levels in the US will exacerbate supply levels and push down crude prices even further. In late June, US crude broke above the $50 level, but has since dropped sharply, losing more than 12 percent in that time.