dglobalnews.com OPEC, non-OPEC committed to inventory cut
Published: Tue, June 06, 2017
Markets | By Armando Jensen

OPEC, non-OPEC committed to inventory cut

OPEC, non-OPEC committed to inventory cut

Oil regained some ground on Thursday following upbeat data from an industry group that US crude inventories fell sharply last week.

Brent crude oil was up 40 cents at US$51.16 a barrel by 0940 GMT (5:40 a.m. ET), while USA light crude gained 40 cents to US$48.72. OPEC and 10 other countries led by Russian Federation agreed last week to extend for nine months, to March, a production cut of 1.8 million barrels a day initially agreed on in November.

In contrast to the optimism in gold, the oil market remains in a deep funk about oversupply and demand and Friday's weak United States jobs report for May didn't improve matters one bit. Brent crude futures were up 1.1 per cent to us$51.31 a barrel.

Brent for August settlement dropped as much as $1.68, or 3.3 percent, to $48.95 a barrel on the London-based ICE Futures Europe exchange.

OPEC announced a production target of 32.50 million bpd at its November 30 meeting, which was based on low figures for Libya and Nigeria and included Indonesia, which has since left.

US West Texas Intermediate crude futures dropped 72 cents, or 1.49%, to $47.64 per barrel.

Output in May increased from 315,000 barrels per day earlier month to 32.21 million. The event is likely to lead to increased production from the USA and eventually skew OPEC's price protections.

However, U.S. crude production rose to 9.34 million bpd last week, up almost 500,000 bpd from a year ago.

Dufner sets Memorial Tournament record
Summerhays has finished in the top 100 in the FedExCup for each of the past five seasons, and a year ago finished T8 at the U.S. Spieth had eight birdies, which was tied with Lingmerth, Summerhays, and Rickie Fowler for the most in the first round.

Rising output from Nigeria and Libya, which are exempted from the deal, is also undercutting oil producers' attempt to limit production.

Market analysts are troubled by a growth in USA crude production that is offsetting efforts from the Organization of the Petroleum Exporting Countries to reduce global oversupply.

"Investors continue to doubt the ability of OPEC to rebalance the oil market, with crude oil prices remaining under pressure amid further signs of rising United States oil production", ANZ bank said on Monday.

Last week OPEC and a number of non-OPEC producers extended a deal to cut 1.8 million bpd in supply until March 2018.

"I think it's still going to be a bit of a debate on the true impact it can have on the oil market", said Olivier Jakob, strategist at Petromatrix.

That has the market really concerned and each weekly rise in the number of active rigs in use in the USA adds to the concern and pressures on prices.

Political issues ranging from a tightening race in the British general election to a pending decision from the USA president to pull out of the Paris climate deal added to the market jitters built up around swelling crude oil supplies from OPEC member Libya, which is exempt from a multilateral effort to balance the market with production declines, and helped weigh on crude oil prices in the Wednesday session.

Like this: