Oil prices drop over prospect of supply boost, falling demand

/ Oil & Gas / Monday, 15 November 2021 07:51

Crude oil prices dropped resulting from expectations of higher supplies and weakening demand.

Brent crude futures fell 58 cents, or 0.7%, to $81.59 a barrel, as of 0151 GMT. U.S. West Texas Intermediate (WTI) crude lost 58 cents, or 0.7%, to $80.21 a barrel.

Both markets have dropped for the last three weeks, hit by a strengthening dollar and speculation that President Joe Biden's administration might release oil from the US Strategic Petroleum Reserve to cool prices.

US energy firms this week added oil and natural gas rigs for a third week in a row with crude prices hovering near a seven-year high, prompting more drilling operations.

The oil and gas rig count, an early indicator of future output, rose by six to 556 in the week to Nov. 12, its highest level since April 2020, an energy services firm said. 

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) last week cut its world oil demand forecast for the fourth quarter by 330,000 barrels per day (bpd) from last month's forecast, as high energy prices hampered economic recovery from the COVID-19 pandemic.

Russia's Rosneft, the world's second-biggest oil company by output after Saudi Aramco, has warned of a potential "super cycle" in global energy markets, raising the prospect of even higher prices as demand outstrips supply.

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