Oil Plunges Ahead of OPEC’s Monthly Report
Oil prices dipped on Monday in Asia as weakening demand weighed on markets, although U.S. futures received some support from reduced American drilling.
Front-month Brent crude futures were down 37 cents at $47.77 per barrel at 0535 GMT. U.S. crude futures dipped 6 cents to $44.57.
The U.S. oil rig count fell by 10 to 652 last week, the second straight weekly drop, while reserves at its main oil storage site in Cushing, Oklahoma, have fallen five of the past seven weeks, pushing U.S. physical crude into multi-year record premiums over futures prices.
The International Energy Agency said that ongoing production cuts would lead to a rebalancing of the market by next year.
Yet several banks said the immediate outlook remained weak. OPEC’s monthly market report will be published later on Monday.
Meanwhile Chinese stocks fell more than 3 percent on Monday morning as concerns over the economy offset optimism that reform among state-owned enterprises (SOEs) would accelerate.
Cheap oil undermines the health of energy firms, which have already seen big share devaluations since prices started falling in 2014.