Global oil prices fall as Saudis keep crude output high
Oil prices have fallen again as global oversupply and low demand foiled the impact of geopolitical tensions in the oil-rich Middle East region.
During Tuesday trade, price of US benchmark West Texas Intermediate (WTI) for delivery in June fell 43 cents to USD 59 a barrel.
During the same day, price of Brent North Sea crude for July delivery decreased 63 cents to hit USD 65.64 a barrel in London afternoon deals, AFP reported.
"According to official data... Saudi Arabia exported just shy of eight million barrels of crude oil per day in March -- the highest export volume in more than nine years," said analysts at Commerzbank in a note to clients on Tuesday.
According to Bernard Aw, market strategist at IG Markets Singapore, "global oversupply with weak demand" continues to keep prices down in spite of the fact that geopolitical unrest has raised concerns about a disruption in the Middle East oil supply.
He added that the crude market is apparently gotten "used to" unrest in the region, and even capture of Iraqi city of Ramadi by ISIL Takfiri terrorists failed to move the market.
Yemen is also engulfed in violence and although the country is not a major oil producer, its coast forms one side of the Bab-el-Mandeb Strait, which is a key strategic entry point into the Red Sea through which some 4.7 million barrels of oil pass each day.
"Fears that the fighting in Iraq and Yemen could hamper the oil supply have clearly given way to a more sober appraisal, for the past twelve months have demonstrated that such concerns are exaggerated," Commerzbank analysts said, adding, "In actual fact, the oil supply from the region has continued to grow."
The International Energy Agency (IEA) announced last week that oil supplies from major OPEC producers, including Saudi Arabia, Kuwait and the United Arab Emirates, are already near their highest levels in three decades.
Oil prices plummeted more than 60 percent between June and January, after the Organization of the Petroleum Exporting Countries (OPEC) refused to cut production despite a global glut.
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