Sábado, 17 Noviembre, 2018

Oil prices rise in expectation of Aramco supply cut to Asia

Oil prices rise in expectation of Aramco supply cut to Asia Oil prices rise in expectation of Aramco supply cut to Asia
Manuel Armenta | 15 May, 2017, 19:55

Ole Hansen, the head of commodity strategy at Saxo Bank, said in a semi-regular newsletter emailed to UPI that crude oil storage level declines came as USA production trends were moderating.

The firm said its 2017 forecast of $50 a barrel for Brent crude now faced a clear "downside risk" as U.S. shale production continued to increase.

Oil prices rose on Wednesday after a larger than expected fall in United States crude inventories and on attempts by Opec to rebalance an oversupplied market by cutting output.

USA crude imports USOICI=ECI fell last week by 799,000 barrels per day, the biggest weekly drop since mid February, to just 6.9 million bpd, the first time they have been below 7 million bpd since early March.

The decline in gasoline inventories and an increase in USA demand registered for the latest week also helped underpin expectations that demand conditions would hold firm and provide net support to the market.

Crude inventories USOILC=ECI fell 5.2 million barrels in the week to May 5, the U.S. Energy Information Administration said.

West Texas Intermediate, the US benchmark for the price of oil, was up 1 percent to $47.82 per barrel.

Oil cartel OPEC are due to meet later this month, which could see an agreement to sustain oil cuts to help raise falling prices.

"Net length (in open crude oil futures positions) is at its lowest level since November 2016, which could support a significant price rally if OPEC does extend production cuts", Jefferies added.

Signs that oil-producing Iraq and Algeria were joining Saudi Arabia backing an extension to supply cuts also supported the price. "Lower 48 (all states excluding Alaska and Hawaii) oil production is set to expand by an additional 390,000 bpd from May 2017 to December 2017 assuming a WTI price of $50 per barrel".

Saudi Arabia's energy minister Khalid al-Falih said on Monday he expected the output deal to be extended to the end of the year or possibly longer.

While US oil inventories fell, the country's oil production continued to rise, jumping above 9.3 million bpd last week, in what is now a more than 10 percent increase since its mid-2016 trough.

Oil prices have increased after Saudi oil giant Aramco announced cuts in supplies to the Asia market.

The news agency reported that state-owned Saudi Aramco will reduce oil supplies to its Asian customers by almost seven million barrels next month as it is likely to witness a surge in domestic power demand over summer.