19 March 2024, Tuesday, 11:47
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Oil prices recover but stay below $50 mark

Oil prices recover but stay below $50 mark

Oil prices edged up on Tuesday after a 5-percent drop in the previous session amid continuing worries that the world is producing too much oil, Reuters reported.

The slump in prices followed new estimates which showed that oil output by the Organization of the Petroleum Exporting Countries had reached the highest monthly level in recent history in July, and also due to weak industrial activity in China, one of the world’s largest oil consumers, according to Reuters.

In addition, Iran intends to increase its production by 500,000 barrels a day as soon as sanctions are lifted and by 1 million barrels a day within a month following that.

Although prices rose on Tuesday, with Brent 35 cents higher at $49.87 a barrel, and U.S. crude Clc1 up 47 cents at $45.64 a barrel, analysts said more falls were expected.

"A retest of Brent crude's 2015 low around $45 per barrel looks inevitable given current ample market supply and intensifying bearish market sentiment toward prices," BMI Research said, although it added that it expected modestly higher prices in 2016 as prices above $60 a barrel were needed for most U.S. shale oil drillers to be profitable.

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