Global markets woke up with a jolt this Monday as oil prices hit fresh lows following shrinking demand from Asia and the fact that the driller of shale oil in the United States have accepted the new realities of the market. According to a report on Reuters, "Oil fell on Monday over signs that U.S. shale drillers have adapted to lower prices and on renewed indications of economic weakness in Asia where refiners are already trimming crude runs. Brent crude LCOc1 was trading at $46.43 per barrel at 1205 GMT, down 33 cents from its last settlement. U.S. West Texas Intermediate (WTI) crude CLc1 was down 30 cents at $45.11 a barrel. Physical markets were also under pressure. Rising Canadian oil flows are having difficulty finding space in pipelines, weighing on Canadian prices. Iran set the official selling price of its light grade for Asia at $0.45 above the Oman/Dubai average for August, down 40 cents on the month.Traders said the lower prices were a result of Asian refiners beginning to cut crude orders, and also due to the region's economic slowdown."
The report went on to add, "Several Asian refiners are maintaining or reducing crude throughput in July and August after refineries around the region in the first quarter binged on the cheapest crude in over a decade. China's economic growth likely cooled to a fresh seven-year low of 6.6 percent in the second quarter, according to a Reuters poll of 61 economists, its weakest in seven years. An oil pipeline leak at Iraq's southern port of Basra has been repaired and pumping has resumed without affecting exports, the Iraqi oil ministry said on Monday. Basra Light crude oil loading had been suspended at two export terminals in Iraq's main oil export port, shipping and trade sources said earlier in the day. Crude exports in August from Iraq's southern ports are set to fall to 2.79 million barrels per day (bpd) from 2.99 million bpd planned for July, according to a preliminary loading program."
According to Morgan Stanley, "Economic run cuts are finally starting in a few markets, but more may be needed," On the other hand Jeffries stated, "Economic run cuts are finally starting in a few markets, but more may be needed,"