Oil dips after brief rally

Oil continues slide.

Oil continues to slide.

19 August 2015 – Oil prices fell again after a brief rise in the previous session, as the US enters the lower demand autumn season and Asia’s leading economies slow down.

Oil prices edged up Tuesday, briefly ending a rout that dominated the last six weeks and pulled down prices by almost a third, after bullish economic data and the prospect of falling crude stockpiles in the US.

But the price rise did not last into Wednesday, when both US West Texas Intermediate (WTI) crude futures and internationally traded Brent fell in early trading in Asia.

“Any recovery in WTI prices from a six-year low may be short-lived with the US entering the slow demand period in September,” ANZ bank said on Wednesday.

US crude futures were trading at $42.37 per barrel early on Wednesday, down 25 cents from their last settlement. Brent was down 28 cents at $48.53 a barrel.

“The recent drop in the price of oil confirms … the global commitment producers have to their current levels of output,” said Scott Cockerham, managing director Houston-based Conway MacKenzie’s Energy Advisory Services.

“Could we see $30 oil in the next 15 months? Absolutely, and headlines like China’s recent yuan devaluation and the prospect of sanctions on Iran being lifted will only contribute to such volatility,” he added.

Cockerham said a slowdown in US drilling activity would not affect global supplies until 2017 and prices would likely remain low but volatile before then.

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