Energy shares lead Asian stock losses as oil falls under $45

Data this week showed China’s manufacturing growth last month slowed to its weakest pace in seven months as domestic and export demand faltered, reinforcing views that the country’s economic growth is starting to moderate after a strong start to the year.

After the cartel cut production, a 22 per cent bounce to a high of US$57.10 in January was erased partly as USA crude output and shale production rose. Even signals from Saudi Arabia and Russian Federation that they’ll prolong the supply reductions haven’t staunched the rout. The kingdom is seen as a driver of OPEC’s production cut deal, with Saudi Energy Minister Khalid al-Falih telling an April conference in Abu Dhabi there appeared to be a growing consensus on a need to extend the cuts, as global inventories remain stubbornly high.

“There’s disappointment that the production cuts we’ve seen from OPEC and others has not had any impact at this stage on global inventory levels”, Sydney-based CMC Markets chief market analyst Ric Spooner said.

“Even nations such as the UAE and Iraq, which have received some criticism over their output levels, have moved a little closer to the compliance in the month of April”, Wang said.

“It is now-or-never for oil bulls”, said USA commodity analysis firm The Schork Report.

United States oil production is increasing and the drawdown on the USA crude stock came in at 930000 barrels less than half of the 2.3 million barrel reduction that had been anticipated, a factor which may soften demand. “If they deepen the cut, the effect will be short-lived”. So, with the big share of probability it is possible to predict the extension of the moratorium for another six months.

While the International Energy Agency still predicts a rapid reduction in the supply glut in the second half of this year if OPEC maintains its cuts, data available right now show few signs of success.

Like Chesapeake, Occidental otherwise would have been expected to be rewarded by investors after disclosing a first-quarter per-share result that was more than twice the average of analysts’ estimates.

Gains in oil futures were capped as concerns over rising USA oil output persisted, after oilfield services firm Baker Hughes reported its weekly US rig count rose by 6 to 703. The culprit: crude prices that tumbled from London to NY as traders abandoned faith in an OPEC-led effort to use supply cuts to counteract a persistent shale-fed glut.

OPEC in its upcoming meeting on May 25 in Vienna will take a call on whether an extension cut is needed, however, below are the reasons which make a production cut extension imminent.

He also pointed to how more fuel-efficient cars coming off the lot continue to guzzle less gas than the old ones they’re replacing.