Saturday 30/05/2020 - 06:22 pm

Oil halted downward slide in February, but worst may not be over

2015.02.27 07:47

 Toronto stocks rose and the Canadian dollar moved higher after oil showed signs of closing out February at a higher price than it achieved a month ago.

West Texas Intermediate, the most common North American contract, was up 75 cents at $49.94 US a barrel in trading Friday morning. That’s an improvement on the $48 level a month ago.

Brent oil, the international contract, was at $61.39 U.S. a barrel on Friday, up from the $52 level a month ago.
Oil has been on a downward trajectory since last September and the real rout began in November, after the Organization of Petroleum Exporting Countries opted not to reduce its daily production.
Slowing global demand for petroleum products, combined with rising output, especially in North America, has been a recipe for very volatile oil prices.
But after six months of moving downward, many believe oil may be at the bottom of its range.
"Evidence suggests the worst is over for oil because prices have stabilized," said Neil Atkinson, head of analysis at Lloyds List Intelligence.
"However, there is an argument that we have paused on a long-term downtrend as these is an ongoing surplus of demand," he told CNBC.
Some economists say oil demand is on the upswing, with China and the U.S. using more.
Supply outages in the North Sea and the shutdown of Libyas production helped boost the price of Brent oil. In the U.S., some refineries are shut for maintenance while others have been affected by a strike.
At the same time, U.S. crude inventories continued to grow, adding another 8.4 million barrels to storage last week, according to government data.
So much U.S. shale oil is being pumped out of the ground it is being stored in tanks waiting to be used. Thats why some analysts say prices could fall as low as $35.
Today’s higher oil prices and improved commodities prices pushed up resource stocks in Toronto.
The TSX was up 87 points at 15,328 at midday.
Financial stocks moved higher after Canadian banks turned in a better than expected earnings performance this week.
The Canadian dollar edged higher to 79.96 US cents.
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