Crude oil falls more than 1% on Monday
The Dollar Business Bureau
Crude oil prices fell more than 1% on Monday as investors accumulated profits after three weeks of gains. Early Monday, Brent crude was trading at $44.61/ barrel, down 1.1%, or 50 cents.
The International Energy Agency (IEA) predicts crude oil prices to gradually pick up in 2018, but only after oil output in China, Colombia, Mexico, Russia and the US reset the global supply and demand prospects.
The IEA forecasts oil demand growth to be around 1.2 million barrels in 2016, a rise in more than 33% slump from over 1.8 million-barrels-a-day expansion in 2015.
"Fundamentals remain bearish and are set to deteriorate further, especially if prices move higher," Morgan Stanley said in a statement.
"Still-elevated inventory levels, the return of some disrupted supply, further boosts to Saudi and Iranian supply, and increased non-OECD product exports all have the potential to move prices lower over the next several months, especially if broader macro sentiment shifts," it said.
Several global oil analysts attributed this price drop to a cashing in after three weeks of rising prices.
On Wednesday, the Energy Information Administration (EIA) will release weekly US crude production and inventories data, in which the analysts suspect, there will be shrinkages in the figure when compared to the previous period.
This week, the Federal Reserve Bank will hold its policy meeting on Tuesday and Wednesday. Traders as well as market expect the committee to keep its key rates unchanged.
A stronger dollar makes oil trade more expensive, especially for those countries which import market fuel using other currencies.
Energy firms across the globe have significantly cut down on oil and gas drilling since mid-2014. The crude prices have fallen almost 70% since then.