dglobalnews.com Oil slips as data points to fast-growing supply
Published: Thu, June 15, 2017
Markets | By Armando Jensen

Oil slips as data points to fast-growing supply

Oil slips as data points to fast-growing supply

Iraq is driving up crude oil exports to the US, the world's second-biggest import market, just as there are signs Saudi Arabia is honoring a pledge to restrict such deliveries, according to tanker-tracking data.

US crude fell 3.57 percent to $44.80 per barrel and Brent was last at $47.01, down 3.51 percent on the day.

Gasoline stocks rose by 2.1 million barrels, compared with analysts' expectations for a 457,000-barrel drop.

The US output has also jumped in the last one year by 10% to 9.3 million bpd.

The Organization of the Petroleum Exporting Countries prefers to talk about output when assessing the impact of the deal among members and 11 allied countries to reduce production by 1.8 million barrels per day (bpd).

BP PLC (BP.LN) (BP.LN) said its latest research report that global crude-oil production in 2016 (http://www.marketwatch.com/story/global-oil-output-in-2016-logged-slowest-growth-in-7-years-2017-06-13) saw its slowest percentage growth in seven years, as output from producers outside of OPEC marked its biggest drop in almost 25 years.

Riyadh is leading an effort by the Organization of the Petroleum Exporting Countries, Russia and other oil producers to cut output by nearly 1.8 million bpd until March 2018 to curb oversupply. The oil price has declined more than 10 percent since the May agreement.

US shale production will surge to a record in July, the EIA projects.

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"They're making a lot of headlines about reducing supplies but that's also right in their seasonal pattern of lowering exports in July, August because of domestic needs", he said. The API reported builds of around 2.8 million barrels in USA commercial crude stocks and around 1.8 million barrels in gasoline stocks.

Crude output from Opec nations rose by 290,000 bpd in May to a 2017 high of 32.08 million bpd, still within the confines of the supply deal, after comebacks in Libya and Nigeria, which are exempt from cuts.

Global oil demand growth will accelerate next year to 1.4 million barrels a day, or 1.5 percent, led by economic expansion in China and India.

In a report on Wednesday, the International Energy Agency said rising US output will contribute to supply growth exceeding demand growth in 2018.

USA stocks mostly fell while the American dollar cut its losses overnight after the Federal Reserve delivered a widely expected interest rate hike.

The bulk of the upward adjustment in non-OPEC oil supply since December "has come from the US", OPEC said.

And it was being observed, "despite the very high overall conformity to the production adjustments in the first four months of 2017", OPEC added.

OPEC stated, "The rebalancing of the market is under way, but at a slower pace, given the changes in fundamentals since December, especially the shift in USA supply from an expected contraction to positive growth".

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