Crude oil market witnessed prices falling to two week’s low in the background of renewed production deployment by the rookie shale producers. The US benchmark WTI fell to $49.39 and the global version -Brent lost $1.24 to $51.75. Market observers say the new down trend is not due to demand and supply reasons.
Rather, reports of more rig deployment by Shale producers sent shock waves across market. Though the development is not going to bring market further down, analysts say that it will strengthen the threshold resistance by Shale against the colluding OPEC.
Shale producer’s willingness and capability to strike the consortium of countries with higher output is an indicator about the future price trends. That crude can’t sit much around $60 or higher without strong supply shortfalls or demand surge.
The Financial Times quoted US data from US drilling company Baker Hughes showing increased number of rigs into shale fields. According to the company, number of rigs drilling for oil in the US rose for a 14th consecutive week. This is the highest number since April 2015.
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