Against market expectations, OECD total oil inventories are still above three billion barrels and the recovery in Libyan and Nigerian supplies, coupled with a fast return of USA shale, will now likely prevent steep stock draws ahead.
Oil prices are still down around 14 per cent for the year so far despite Opec’s deal to cut production until March 2018 to prop up prices. The production data showed that the production from Libya was much stronger than expected and this pushed the oil prices through $45 and then for a couple of weeks, the oil inventory data from the United States showed a clear build up in the inventory when a draw was expected and this added to the pressure on the oil prices. However, 70 percent would not rule out a further drop into the $30s.
WTI posted was priced $1 (2.41 percent) higher Friday to $42.50 a barrel. Oil is down about 9 percent this quarter.
Brent Crude at 47.80, and WTI Crude Oil at 45.23 finished higher and trading as per recommended marks. And recent reports suggest that Saudi Arabia may specifically cut oil shipments to the U.S.in an attempt to improve inventory data. In 2016, the USA imported just over 400 million barrels of crude from Saudi Arabia. A period of low prices persisted into the mid-2000s, with a single minor spike upward during the first Gulf War in the early 1990s. The low in August, 2016 was $39.19 per barrel.
Libya’s oil production has climbed to more than 1 million barrels a day for the first time in four years just as oil prices capped the longest run of gains in six months after US shale explorers paused a record drilling expansion.
Upbeat U.S. economic data Monday also boosted sentiment for oil, raising prospects for demand. They’ve seen copper prices drop as scrap dealers de-stocked heavily to take advantage of higher prices. Thirteen percent say demand is trending weaker.
“We have just completed a marathon round of meetings in Vienna, where the OPEC and non-OPEC countries have agreed to continue working together as part of the Declaration of Cooperation in order to ensure that we achieve a balanced market sooner rather than later”.
“Several factors risk tipping the market back into over-supply”, Birch said. Gartman said USA technology will expand to Russia, Mexico, China the Middle East and Africa. “He “gets” it; few others around him do”, Garman wrote.
London- Libya’s oil production has approached one million barrels per day after it reached an interim agreement with Germany’s Wintershall to resume production amid a contract dispute.
These profits mean that the market is slightly high since the beginning of this week, after it remained low during most days of the last month.