zerohedge.com / by Tyler Durden / 01/25/2016 06:48 -0500
After the biggest two-day surge in oil in seven years, early in the overnight session both Brent and WTI continued their run for a third day, entering a bull market, 20% up from recent lows hit just last week (yet still 15% down on the year) when Saudi Arabia spoiled the momentum party after the world’s biggest crude exporter said it’s keeping up investments in energy projects while diesel consumption in China dropped for a fourth consecutive month, signaling an industrial slowdown.
WTI reversed course and futures dropped as much as 4.1% in New York when Saudi Aramco Chairman Khalid Al-Falih announced his company hasn’t reduced its investment capacity amid lower crude prices, suggesting that oil will remain oversupplied for the foreseeable future. As a result, West Texas Intermediate for March delivery dropped as much as $1.33 to $30.86 a barrel on the NYMEX and was at $31.14 at pixel time after rising as high as $32.74 earlier. “The Saudi news surely would give a little bit of a worry that production would remain strong,” Daniel Ang, an investment analyst at Phillip Futures, said by phone from Singapore. “The main reason for oil losing steam still comes from the fact that oil markets are currently in oversupply.”
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Thanks to BrotherJohnF