Iraq's oil prices drop after hike in crude output

Published May 4th, 2015 - 06:34 GMT

Oil prices have fallen in weekend trading after Iraq's Ministry of Petroleum announced its crude oil exports have hit a record in April.

During weekend trading, June Brent crude fell 32 cents to settle at USD 66.46 a barrel. Brent price had experienced a 21-percent jump in April.

Meanwhile, US June crude fell 48 cents to settle at USD 59.15, after having hit a high of USD 59.90. US crude futures had gained 25 percent last month.

However, both Brent and US crude settled well above intraday lows, after data was released showing another reduction in drilling rig activity and there were also news of a shut gasoline-making unit in Venezuela.

Venezuela's Amuay refinery with a capacity of 645,000 barrel-per-day (bpd) has halted its catalytic cracking unit for maintenance.

The weekend fall in price was initially started by news that Iraq's oil exports have climbed to 3.077 million barrels per day (bpd) in April, compared to 2.98 million bpd in March.

According to the country’s Oil Ministry, Iraq exported a total of 92.8 million barrels over the 30 days of March and brought in USD 4.8 billion in revenue, with an average selling price of 51.7 dollars per barrel.

Preliminary statistics issued by Iraqi State Organization for Marketing of Oil (SOMO), showed the April rate of crude oil exports was unprecedented since 1980s.

"What is driving prices these days is less physical markets, which remain very weak, but more expectations of future tightening," said Amrita Sen, chief oil analyst at Energy Aspects.

Also in the weekend, the US dollar index, .DXY, posted the best daily gain in a month, after experiencing a two-month low.

The stronger dollar put pressure on several dollar-denominated commodities, including oil, prompting speculators “to cut their net long US crude futures and options positions in the week to April 28,” the Commodity Futures Trading Commission said on Friday.

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