Analysts from Everitt Lawson Group noted that spot Brent crude oil futures stood at around $71.81 U.S. Dollars per barrel, around fifty basis points lower then its last close.
Oil markets as a whole remain tense due to the ongoing U.S. sanctions on Iran combined with a political crisis in Venezuela, which is in the top ten countries of highest producers of Oil.
“Simply put, Crude oil prices have fallen due to the stockpiles in the U.S. increase to their highest levels. When demand decreases and supply is high, the price will generally fall flat and lower,” commented David Armitage, Director of Institutional Trading at Everitt Lawson Group.
Stockpiles in the U.S. currently stand at 470 barrels while production set a high of around 12.4 million barrels per day (bpd). OPEC members are reluctant to withhold supply so that it can increase the market price.
The current situation in Venezuela will be the most pressing matter in regards to upcoming OPEC meetings to discuss the amount needed to fill the expanding supply.
“Reports on the largest listed oil and gas companies showed that industry margins have increased by over 200 percent in 2018 alone. The current estimates of global marginal costs of oil do remain steady at around $71 per barrel,” added Andrew Bale, Head of Corporate Equity at Everitt Lawson Group.
About Everitt Lawson Group
Everitt Lawson Group is a Taipei, Taiwan-based, pure-play boutique investment management house with a strong record of delivering impressive investment returns to private and institutional clients around the world.