Wednesday, 26 July, 2017

OPEC chief sees oil producers near to re-balancing market

A petro-industrial factory is reflected in a traffic mirror in Kawasaki near Tokyo A petro-industrial factory is reflected in a traffic mirror in Kawasaki near Tokyo
Stacy Diaz | 21 April, 2017, 16:40

"The rebalancing in US crude stocks may have got under way, but concerns of further gasoline builds are rife even as the USA summer driving season shifts up a gear", said Stephen Brennock, an analyst with PVM Oil Associates.

U.S. West Texas Intermediate crude futures were also down 18 cents at $53.

Oil prices dipped on Wednesday as bloated USA supplies weighed on markets while a fall in Saudi crude exports was offset by rising production in the country.

A global crude glut has persisted even as the Organisation of the Petroleum Exporting Countries and other producing countries have worked to reduce output under an agreement to cut supplies nearly 1.8 million barrels per day in the first half of 2017.

The gasoline inventory rose by 1.4 million barrels as refinery runs increased by 334,000bpd in the US.

Global benchmark Brent crude futures swooned as low as $54.61, the lowest since April 7, then settled down 47 cents at $54.89 a barrel.

"Although the oil market will likely tighten throughout the year, overall non-OPEC production, not just in the United States, will soon be on the rise again", the IEA said in the report.

Patrick Pouyanne, chief executive of French oil and gas giant Total, said on Thursday prices could fall again by the end of the year, citing US shale production.

This means that the Saudi oil may still make its way into a glutted global market as significant proportions of its refined fuel products are exported.

CRUDE oil fell slightly yesterday on signs that the United States is continuing to add output largely counteracting the Organisation of Petroleum Exporting Countries, OPEC, efforts to cut production.

Oil steadied on Wednesday after OPEC said it was committed to eroding a global supply overhang that has dogged markets since 2014, but with USA output and inventories rising, analysts said prices looked vulnerable.

Analysts said they expected crude inventories to have fallen by around 1,5 million barrels last week. While compliance has been strong among OPEC countries, production cuts have lagged among others that have agreed to act to curb oil prices, including Russian Federation. Joint talks with non-OPEC oil ministers will also take place that day, two sources said.

Retail sales in the USA fell for a second straight month in March and consumer prices dropped for the first time in just over a year, official data showed on Friday.