ibusinesslines.com May 25, 2018

Oil dips as U.S. stocks increase, defying Opec-led reduction efforts

20 May 2017, 01:58 | Kelvin Horton

REUTERS Cooper Neill

REUTERS  Cooper Neill

But by May 17, July contracts for Brent crude were trading at $51.55. In line with "stronger recent performance from the USA shale sector, we have revised upwards our expectation throughout 2017, and we now expect total USA crude production to exit the year 790,000 b/d higher than at the end of 2016, which is an upward revision of 100,000 b/d since last month's report".

United States crude inventories rose by 882,000 barrels in the week ending May 12 to 523-million barrels, according to the American Petroleum Institute (API), defying expectations of a drop. Both benchmarks slipped back from session highs after a report that USA energy companies added oil rigs again in the latest week.

Analysts say Saudi Arabia wants to extend the plan by up to 9 months through next winter.

Both benchmarks rose on Wednesday after news of a drawdown in USA crude inventories and a dip in US output.

USA crude stocks fell by 5.2 mb w/w, the largest decline since the year-end dip in stocks.

In addition to USA crude stocks drawing down for the sixth consecutive week, the EIA showed an increase in refining rates.

Many investors remain concerned about growing US crude production, which has climbed 10 percent since mid-2016 to 9.3 million barrels per day. That could slow the supply drawdown.

Crude stocks at the Cushing, Oklahoma, delivery hub USOICC=ECI rose by 35,000 barrels, EIA said. We continue to expect OPEC production cuts to have their intended consequences, and we expect a favorable outcome to the May 25 OPEC meeting.

We assume that OPEC rolls over the November agreement in late May for a further six months at the current level of production restraint. Crude oil might close the day with profits. Off-topic, inappropriate or insulting comments will be removed.

Other News

Trending Now

US to announce $110 billion Saudi arms sale as Trump visits
Trump arrives in Saudi Arabia on Friday and then Israel and the Vatican, the centers of the world's three predominant religions. He will seek to rebuild relations with the Muslim world on his first foreign trip even as political scandals mount at home.

Trump calls appointment of special counsel a 'witch hunt'
If Mueller wraps up the probe relatively quickly and finds no damning evidence, that would also be a boon for the White House. Bush's administration leaked the name of Central Intelligence Agency operative Valerie Plame to reporters.

China Threatened War If Philippines Drills for Oil -Duterte
President Duterte bares details of a meeting with Xi Jinping to prove to critics he isn't scared of China . India and Singapore held their first naval exercise in the South China Sea in 2005.

Canelo Alvarez Dominates Chavez Jr., Announces GGG Fight in September
Through 12 rounds of boxing Alvarez completely out-classed his native adversary, taking home a lopsided unanimous decision win. Alvarez (49-1-1, 34 KOs) showed off his skills right from the opening bell, turning a highly-touted fight against Chavez Jr.

Pep: Bayern, Barca would have fired me
But there was nothing but mutual respect on display between the men , whose philosophies could not be any more different. Pep Guardiola has made an interesting statement when assessing his first season at Manchester City in the summer.

Celtics' Thomas leaves with hip strain
Before they knew it, the Cavaliers found themselves in the NBA Finals against the Golden State Warriors last season. The Celtics know there were a lot of problems in game one that need to be fixed just to keep in close in game two.

Trump should thank Rosenstein for naming a special counsel
If Mueller wraps up the probe relatively quickly and finds no damning evidence, that would also be a boon for the White House. President Donald Trump's inner circle has included white supremacists and potentially compromised foreign players.