Miércoles, 17 Octubre, 2018

Oil prices end lower for a second session in a row

Manuel Armenta | 20 Abril, 2017, 18:53

A number of key OPEC members including top exporter Saudi Arabia support extending their supply cut into the second half of 2017 if all participating producers, including Russian Federation and other non-OPEC countries, agree, OPEC sources have told Reuters. Prices held ground at their lowest level in more than a week, with traders showing concern that recent data point to the likelihood of further growth in US crude production. We get the Crude Oil Inventories announcement coming out during the day, so having said that I believe that pullbacks could appear, but they should in the end of being buying opportunities.

Oil prices were stable on Wednesday as OPEC said it was committed to drawing down a global supply overhang that has dogged markets since 2014, although bloated USA output and inventories still weighed on crude.

Demand for petroleum products was down slightly from a year ago.

If that is right, May will have the biggest monthly increase since February 2015 and the highest monthly production level since November 2015. US crude futures were down 9 cents at $50.50 a barrel. Futures touched $51.43, the lowest since April 6.

"EIA (US Energy Information Administration) estimates for a combined 124,000 barrels-per-day growth in US shale production over May have added another bearish element to the market", wrote analysts at JBC Energy, based in Vienna.

Meanwhile, "oil prices have traded in a tight $5 range for over a month". If they continue their production cap, USA shale producers will fill the void.

The June delivery for Brent, on the other hand, dropped by 0.8% or 47 cents to reach $54.89 per barrel. Data from the American Petroleum Institute showed on April 18 that although crude inventories fell by 840,000 bbl in the week to April 14, they remained near record highs.

"There's been a lot of attention paid to OPEC production cuts, while nearly nobody has focused on the gains elsewhere", Stephen Schork, president of Schork Group Inc., a consulting company in Villanova, Pennsylvania, said by phone.

Brent crude futures were at $53.31 per barrel at 0108 GMT, up 38 cents, or 0.72 percent, from their last close.

Earlier a number of oil nations, including Kuwait and Azerbaijan, voiced support to possible extension of the oil deal, noting that the extension will 'accelerate the rebalancing of the global oil market.