March 24, 2018

Oil prices fall on relentless rise in United States crude output

14 March 2018, 06:08 | Frank Carlson

U.S. crude production pushed up largely by shale oil drilling is expected to rise above 11 million bpd by late 2018. Image source Reuters

Oil prices stable after two-day decline but rising U.S. output drags

ING's outlook is in contrast to bullish views from Royal Bank of Canada and Goldman Sachs Group BMI Research and Societe Generale SA, which see prices supported as strong demand soaks up supply from the U.S. While Patterson does see healthy oil consumption, he said growth may slow and fail to completely absorb gaining American output.

In oil markets, US energy companies last week cut oil rigs for the first time in nearly two months, with drillers cutting back four rigs, to 796, Baker Hughes (GE.N) energy services firm said.

US West Texas Intermediate (WTI) crude futures were at $62.22 a barrel up 18 cents, or 0.3 per cent while Brent crude futures were at $65.70 per barrel, up 21 cents, or 0.3 per cent, from their previous close.

While the producer group complied with a pledge to curb output and ease a glut in 2017, USA flows that are gaining a bigger slice of the prized Asian market may prompt some nations to boost supplies, said Warren Patterson, a commodities strategist at the Dutch bank.

But in a sign that an early-year rally in crude oil may have fizzled out, money managers cut their combined net long positions in the six most important futures and options contracts linked to petroleum prices by 50 million barrels in the week to March 6.

Tottenham player ratings in 4-1 win: Son's brace leads the way
The situation worsened for Spurs when Kane was forced off in the 34th after colliding with Bournemouth goalkeeper Asmir Begovic . England's opening game is against Tunisia in Volgograd on June 18th.

On the other hand, the Iranian oil minister Bijan Zanganeh mentioned that the Organization of the Petroleum Exporting Countries or OPEC is going could come to a conclusion on their June meeting to ease the current production curbs by the year 2019. "They continue to give market share away to the U.S". "We need to see prices in the short-term trade below $60 to reduce that incentive for USA producers", he said. The most bullish scenario will be a weaker U.S. Dollar and higher equity prices.

U.S. crude inventories probably expanded by 1.9 million barrels in the week through March 9, according to a Bloomberg survey before Energy Information Administration data on Wednesday.

Oil prices fell on Monday on expectations that U.S. output will rise this year, erasing earlier gains due to lower weekly USA rig counts and falling United States unemployment. Asia is the biggest buyer of the supplies.

"Venezuela is obliged to supply barrels to China and Russian Federation to pay back debts, so not too much is left for others, mainly India", Ehsan Ul-Haq, director of crude oil and refined products at consultancy Resource Economist, told Reuters. Only Russia pumps more, at almost 11-million barrels a day.

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