Oil prices erase earlier gains

There are other geopolitical developments that have also contributed to the price spike, with market participants rebuilding an oil-price risk premium attached to potential production shortages in the Middle East.

Among major oil- and gas-producing states, Oklahoma lost six rigs, Texas declined by four and Kansas, Louisiana, North Dakota, Ohio and Pennsylvania each dropped by one.

Since 2014, oil prices have declined significantly, causing serious difficulties for OPEC’s individual commodity exporters, whose economies are burdened by lack of oil revenue.

On the high debts of SK Petro, Ng said the company’s gearing of 1.27 times for financial year 2016 was acceptable for an order book exceeding RM25bil and cash position of RM1.26bil. In the short term, oil stocks may rally as long as oil prices are on the uptrend.

Brent crude oil was pressured by mixed supply signals in the OPEC report, losing about three-tenths of a percent to trade at $52.48 per barrel in early market movements.

This outlook will be underpinned by sustained USA and India growth momentum, continued recovery in Europe and Japan as well as a moderate, rather than sharp slowdown, in China.

It hiked its forecast for global demand for oil this year to 92.86 million barrels per day, up from 92.79 mbpd.

“We think that prices are likely to remain capped to the upside for the remainder of this quarter in line with our forecast due to weakening product demand, burgeoning crude and product stocks, and limited supply adjustments”, Barclays said.

Market participants are watching to see if Saudi Arabia and Russian Federation, the biggest non-OPEC producer, will meet later this month to discuss the oil market, as a few reports have indicated, said Stuart Ive, a client manager at OM Financial.

The lower oil prices made for a mixed session on European markets.

Columnist Yap Leng Kuen sees there is still a few uncertainty in assessing the rebound in oil price.