En Español

Very usefull links


News links




Dow Jones

Oil price



Views and News





Oil little changed Tuesday as growing U.S. supply offsets bullish Saudi comments



Petroleumworld.com 03 08 2017

Oil prices ended little changed on Tuesday, as growing U.S. production expectations offset earlier gains after Saudi Arabia's oil minister said market fundamentals were improving.

The market, however, fell in post-settlement trade after data from industry group the American Petroleum Institute showed U.S. crude stocks last week rose 11.6 million barrels, or more than five times analysts' forecast.

If the build is confirmed by the U.S. Energy Information Administration (EIA) at 10:30 a.m. EST (1530 GMT) on Wednesday, it would be the ninth straight weekly rise in inventories that are already at record highs.

At the CERAWeek energy conference in Houston, Saudi Oil Minister Khalid Al-Falih said last year's agreement by OPEC and non-OPEC countries to curb supplies and boost prices has improved oil market supply and demand fundamentals.

But Falih said that happened only because Saudi Arabia cut beyond what it pledged, bringing the kingdom's output below 10 million barrels per day (bpd). He also said the Organization for the Petroleum Exporting Countries (OPEC) would not let rival producers take advantage of the cuts to underwrite their own production investments.

The group is expected to meet again in May, when it could consider extending the production cuts.

Brent futures slipped nine cents, or 0.2 percent, to settle at $55.92 a barrel, while U.S. West Texas Intermediate (WTI) crude lost six cents, or 0.1 percent, to settle at $53.14.

Both benchmarks were about 0.7 percent lower after the API data.

Oil prices have been stuck in a $3 band since February, failing to take off after OPEC implemented, to a surprisingly high degree, the first production cut in eight years.

Prices came under pressure as U.S. shale oil drilling increased after WTI rose firmly above $50 a barrel in December after OPEC sealed the deal with Russia and other non-OPEC producers.

"OPEC has unrealistic expectation as to what their production cuts can achieve," said Phil Davis, managing partner at PSW Investments in Woodland Park, New Jersey, noting U.S. production over the next two years is expected to wipe out much of the OPEC cuts.

The EIA projected U.S. oil production would rise to an average of 9.2 million bpd in 2017 and 9.7 million bpd in 2018, which, if correct, would top the current record high of 9.6 million bpd set in 1970.

Fund managers have doubled their net long positions in Brent, WTI and options to 951 million barrels between the start of November and Feb. 21, betting OPEC's output cuts would lift prices.

But that bullish sentiment has wavered with Russia's lackluster participation in the cuts, rising U.S. shale output and signs OPEC countries began increasing crude exports in February.

Russia promised to implement its 300,000 bpd share of production cuts by the end of April. But brokerage Marex Spectron predicted Russian production and exports would rise gradually, which would lead to "a quick deterioration of the short-term supply conditions."

Story by Scott DiSavino; Additional reporting by Devika Krishna Kumar in New York, Sabina Zawadzki in London and Keith Wallis in Singapore; Editing by Marguerita Choy and David Gregorio from Reuters.

We invite all our readers to share with us
their views and comments about this article

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

CERAWeek 2017
MAR 6-10, 2017







Contact: editor@petroleumworld.com,

Editor & Publisher:P.Ohep F. /Producer - Publisher:P.Ohep F./
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2016, Petroleumworld   / Elio Ohep Fitzgerald- All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.