View the article online at http://citywire.co.uk/money/article/a1002013
Oil glut fears and 'dovish' Fed depress market spirits
FTSE 100 gets week off to poor start as oil oversupply fears depress shares in energy majors and pound falls on government's intention to trigger article 50 at end of month.
US drillers added 14 oil rigs in the week to 17 March, bringing the total up to 631. This represents the highest level since September 2015, according to energy services firm Baker Hughes. Shale production is also expected to reach a six-month high in April.
Greg McKenna, chief market strategist at brokerage AxiTrader, said the fall in crude oil prices could be attributed to ‘the cracks in the Opec/non-Opec deal’ with US shale oil back as the new swing player in production.
However, other market commentators expect oil markets will tighten soon, arguing that the Opec-led cuts will only start to take effect from April.
‘Over the coming weeks we expect a sharp reduction in imports and increase in refining runs which should lead to impressive crude inventory draws,’ analysts at AB Bernstein commented.
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