Miércoles, 19 Setiembre, 2018

Opec chief sees oil producers near to re-balancing market

Manuel Armenta | 20 Abril, 2017, 05:50

Crude oil prices were relatively even in early Wednesday trading as continued US energy sector strength balances an OPEC-led production ceiling.

Amid rising optimism about where oil prices are going, the EIA reported a 1-million-barrel draw in crude oil inventories for the week to April 14, just a day after the American Petroleum Institute estimated commercial oil inventories had fallen by a modest 840,000 bpd but gasoline inventories had gone up surprisingly by 1.37 million barrels.

But the 1.5 million barrel increase in gasoline stockpiles raised fears of a potential repeat of past year, when a glut of gasoline caused refiners to go on a diet, cutting their purchases of crude and sending oil prices lower.

Oil prices have dropped by around half since 2014 and now hover just above $50 per barrel.

West Texas Intermediate for May delivery slipped 41 cents to $52 a barrel at 11:30 a.m. on the New York Mercantile Exchange.

Meanwhile, investment banks are spreading optimism for oil prices, encouraged by the prospect of OPEC agreeing to an extension of its six-month production cut agreement.

Brent crude futures, the worldwide benchmark for oil, were at $54.77 per barrel at 0354 GMT, down 12 cents from their last close.

But U.S. stockpiles and production have cast doubt on whether the OPEC cuts were enough.

All oil producers taking part in a supply-cut pact are committed to bringing global inventories down to the industry's five year average and restoring stability to the market. Gasoline consumption also declined by about 1 percent to 9.3 million barrels.

"Broadly speaking, any sustained rally for global oil prices continues to be challenged by a steady rise in US oil production", said Robbie Fraser, commodity analyst at Schneider Electric, in a note Monday.

USA production trends come as members of the Organization and Petroleum Exporting Countries gear up for May meetings to consider extending a production deal meant to bring the energy market back to balance. Opec exempted Nigeria and Libya past year from cutting production, due to their internal conflicts, while it agreed to let Iran pump an additional 90,000 barrels a day to reach output of about 3.8 million. The United States and allies lifted certain sanctions against Iran in late 2015 allowed Tehran to more than double its crude exports over 2016.