Oil near two-month low on economic woes, drillers adjust to lower prices - 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, Reuters reported.
Brent crude futures were trading at $46.42 per barrel at 0419 GMT (12:19 a.m. EDT), down 34 cents from their last settlement, while U.S. West Texas Intermediate (WTI) crude was down 37 cents at $45.04 a barrel, according to the report.
Prices also dipped in physical markets. Iran has set the official selling price of Iranian Light grade for its Asian buyers at $0.45 above the Oman/Dubai average for August, down 40 cents from the previous month, an industry source with direct knowledge of the matter said on Monday, according to Reuters.
Traders said the lower prices were a result of Asian refiners beginning to cut crude orders in an adjustment to a sharp rise in crude prices since January, and also to the region's economic slowdown, the report said.
"Crude imports to Asia over the last few months are falling ... (but) volumes were so high over the last year thanks to the rush to take advantage of the low oil prices, that it was rather natural that we would see a slowdown sooner than later," said Ralph Leszczynski, head of research at ship broker Banchero Costa.
Goldman Sachs said that it expected "WTI oil to remain in a range of $45-50 per barrel over the next 12 months," Reuters wrote.
Meanwhile, there is mounting evidence that U.S. oil producers can live with crude prices of $45 or higher, as oil drillers added rigs for the fifth week in six, U.S. oil bankruptcies became sparse in June, and bullish U.S. oil bets dropped to near four-month lows, according to the report.
Saudi Arabia's energy minister Khalid al-Falih said on Sunday the oil market was becoming more balanced in terms of supply and demand and, as a result, prices were stabilizing.