More details of cuts in oil production as the Abu Dhabi National Oil Company confirmed that it would ship 17% less Upper Zakum crude than contracted for in April. This will follow a 15% reduction in March. OPEC is schedule to reduce crude oil shipments by 1.7% in month ending 14th March. OPEC members will load 22.8 million barrels a day in this period, down from 23.2 million a day in the month ended 14th February.
Despite these announcements crude oil fell in New York as signs that the global recession is deepening after Japan’s manufacturers’ cut production at a record level. Japanese data confirmed that the world’s third largest consumer of crude oil is headed for its worst postwar recession. Crude prices also fell on dollar strength. The oversupply in the market, coupled with low demand, is unlikely to change in the coming months.
Crude oil for April delivery fell as much as $1.42 – over 3%, to $42.80 a barrel on NYMEX. However, by 17.00 GMT spot WTI had regained some of these losses by trading at $43.76.
