Oil trades near seven-month low

19 June, 2017, 13:19 | Author: Leticia Walters
  • Sample bottle of crude oil are seen in this illustration

West Texas Intermediate for July delivery dropped 22 cents to $US44.51 a barrel at 12.47pm on the New York Mercantile Exchange.

OPEC and its allies have promised to restrict output until at least the end of the first quarter of next year to try to drain surplus supply.

Both benchmarks remained roughly 13 per cent below where they stood in late May, when producers led by the Organization of the Petroleum Exporting Countries (OPEC) extended a pledge to cut production by 1.8 million barrels per day (bpd) by an extra nine months until the end of the first quarter of 2018.

Oil prices tumbled to the lowest level in seven months Wednesday, as high oil inventories continued to erode confidence in the ability of major producers to ease a global supply glut.

However, oil stocks are near record highs in many regions across the world as traders anticipate further fall in prices.

Crude prices fell almost 4 percent on Wednesday, after US gasoline inventories rose unexpectedly and the International Energy Agency said it expects supply to outpace demand in 2018 despite consumption hitting 100 million bpd for the first time.

As such, OPEC said, in its monthly report, "Although oil prices rebounded from five-month lows in (mid-May), following positive USA jobs data and assurances by Saudi Arabia that Russian Federation is ready to join OPEC in extending production adjustments to reduce a persistent supply glut".

"The market is in trouble", said Tamas Varga, analyst at London brokerage PVM Oil Associates. On May 25, they agreed to extend their cuts into March 2018.

Crude output from OPEC nations rose by 290,000 bpd in May to a 2017 high of 32.08 million barrels per day, according to the EIA.

But production in the U.S., which is not part of the deal, has jumped 10% over the past year to 9.33-million barrels per day.

The continuous rise in the United States production further negated the impact of restriction in oil production. The US Energy Information Administration (EIA) expects production to rise above 10m bpd in 2018.

OPEC now predicts US production will increase by 800,000 bpd in 2017, compared with an expected decline of 150,000 bpd last December.

U.S. inventories fell less than forecast last week, keeping supplies more than 100 million barrels above the five-year average, according to data from the Energy Information Administration on Wednesday.

While oil prices traded between $48 and $55 a barrel at the beginning of the year, the market likely has adjusted to a new base range of about $43 to $49 a barrel, said Mark Waggoner, president at Excel Futures.

Recommended:

  • Trump Confirms Being Investigated for Firing Ex-FBI Director Comey

    It is what it is". "Sad!" the United States president tweeted. The tweets prompted Sen. "I hope you can let this go". Others felt Trump was on the right track.

    Microsoft isn't making a profit with their new Xbox One X console

    Later, when asked if the console would be sold at a loss, Spencer chose to avoid the question with his words. Spencer gave two reasons for the smaller library of compatible original Xbox games on the Xbox One .

    Trump signs Qatar weapons deal despite terrorism claims

    Also on Wednesday, two USA naval warships sailed into Doha to take part in joint military exercises with the Qatari navy. The agreement also was signed amid the diplomatic row between the bloc of countries headed by Saudi Arabia and Qatar .
  • Trump lawyer denies president is a probe target

    Removing Trump would require substantial Republican support - first in the House and then in the Senate. All this probing of President Trump and his family seems more of a persecution than anything else.

    Trump lawyer: President not under investigation in Russia probe

    Gingrich also cited the friendship between Mueller and Comey, which the Trump supporter described as "weird". Sekulow said Trump took action based on their recommendation, and as a result, he is being investigated .
    South Korea to scrap building new nuclear power plants

    South Korea to scrap building new nuclear power plants

    The former president Lee Myung-bak saw nuclear as an important source of clean energy, while Park wanted to increase the number of reactors to 36 by 2029.
  • Vehicle rams worshippers near London mosque: Muslim leaders

    London Mayor Sadiq Khan called the incident a " horrific terrorist attack on innocent people " on social media. London Ambulance tweeted: "We have sent a number of resources to an incident in Seven Sisters Road".

    One person arrested after vehicle hits several people in London

    Sky News reported that police said the incident happened after worshippers were leaving the Finsbury Park mosque after prayers. She said a police officer was doing what looked like a "cardiac massage, as if they might have had a bad heart or something".
    LG G6+ and G6 32 GB models are finally official

    LG G6+ and G6 32 GB models are finally official

    The G6 was oddly fragmented between regions , with the USA exclusively getting wireless charging at the expense of the quad DAC. In LG G6+, you get three color options of Optical Astro Black, Optical Terra Gold, and Optical Marine Blue.
  • Ward can 'outbox' Joshua - Hunter

    Ward can 'outbox' Joshua - Hunter

    Andre Ward landed a clean counter right hand to the chin of Kovalev which had the boxer nicknamed "Krusher" visibly shaken. Why get away from it? He will continue to do it. "After this, we don't want to hear any excuses", Ward said ( via ESPN ).

    Japan Trade Data On Tap For Monday

    The yen was 2.3 percent weaker against the dollar compared with its year-before level, which helped push up imports costs. Exports are called higher by an annual 16.0 percent after gaining 7.5 percent in the previous month.
    Syrian army declares 48-hour ceasefire in Deraa

    Syrian army declares 48-hour ceasefire in Deraa

    Sponsored Content - Download our Executive Briefing to learn how agency and industry experts are hoping to reduce insider threats. It said the "de-escalation zones" agreement would be a step towards a "permanent and comprehensive cease-fire all across Syria".


Popular

Mamata leaves for Netherlands to address United Nations meet amidst GJM protests
Union home minister Rajnath Singh spoke to the chief minster yesterday for an update on the situation in Darjeeling . Regarding the situation in Darjeeling , the Chief Minister said, "Duties have been evenly distributed to everybody".

Shot congressman Steve Scalise off the critical list
Doctors said Friday the bullet entered at his hip and traveled across his body, causing severe damage to internal organs. Trump added that Scalise is "having a hard time, far worse than anybody thought" following the shooting Wednesday.

Hamilton Jumps Back Into Title Contention With Win In Canada
Ricciardo managed to hold onto third with Perez barreling down on him, while Hamilton and Bottas took an easy 1-2 for Mercedes .

Centrica PLC (CNA) Earns "Sell" Rating from Deutsche Bank AG
The shares were sold at an average price of GBX 2,283 ($28.88), for a total transaction of £182,640 ($231,043.64). (NYSE:BLK). Beaufort Securities reissued a "speculative buy" rating on shares of HSS Hire Group PLC in a report on Thursday, April 6th.

Russia eases to 2-0 Confederations Cup win over New Zealand
Tommy Smith then tidied up when Poloz poked a close-range shot slowly past Marinovic. Michael Boxall got a touch on the ball and was credited with an own goal.