Oil Prices Turn Lower On Surprise US Stockpile Gain; Production Up

02 May, 2018, 01:38 | Author: Lora Ball
  • Rising US rig count knocks oil, but prices remain near 3-year highs

"The price rise is due to growing expectations of new USA sanctions ... which would doubtless reduce the oil supply from Iran", Commerzbank said in a research note, Reuters reported. The S&P Global Platts survey forecast a supply decline of 500,000 barrels for gasoline, while distillates stockpiles were expected to be unchanged.

OPEC and its partners agreed to cut oil output by 1.8 million barrels per day since January previous year, an effort which has recorded a 149 percent success, and has boosted prices to $74 per barrel as at Thursday.

Prices will be pressured by rising USA production as shale drillers try to take advantage of higher prices by ramping up activity.

West Texas Intermediate reversed lower, dropping 0.4% to $67.44 a barrel.

Exxon Mobil (XOM) fell 0.7% in the stock market today.

Brent crude for June settlement, which expires Monday, dropped 74 cents to US$73.90 a barrel on the London-based ICE Futures Europe exchange.

Futures in NY are up 3.8 percent this month, even after a 1 percent drop on Monday, following data that showed an increase in USA drilling activity.

More news: Tense Russia ties, Afghan peace hopes top North Atlantic Treaty Organisation agenda

Pressuring the markets early Monday is a rising rig count which could lead to higher USA production.

Oil prices slid more than 1 percent on Tuesday as the dollar remained near a four-month high, but worries that U.S. President Donald Trump will pull out of the Iran nuclear deal underpinned the market.

Trump has until May 12 to decide whether to restore sanctions on Iran that were lifted after the worldwide agreement. Prices are up 5.2% for the month.

"It's only Trump who wants to back out of the deal, but he wants to back out of so many deals ..." Gains were likely limited by this week's higher than expected USA crude oil and gasoline inventories as well as rising US production. The global benchmark crude traded at a US$6.43 premium to June WTI. It also shows that many traders are growing increasingly skeptical about the latest rally - most of the short interest in the sector so far this year occurred in April, according to S3 Partner's findings. The rig fleet has expanded throughout the entire month of April, adding a total 28 units. Only Russia now produces more, at around 11 million bpd.

The price action was choppy this week with both WTI and Brent posting two-sided moves. At the same time, OPEC-led production cuts have continued to tighten global markets, despite record-setting USA crude output.

US crude inventories likely rose by 1.3 million barrels last week, while gasoline and distillate stockpiles fell, a preliminary Reuters poll showed on Monday ahead of data by the Industry group the American Petroleum Institute later in the day.

Recommended:



Popular

Khomenei: US provoking Gulf nations to confront Iran
The Leader has on various occasion called for the purchase of Iranian goods and plans to curb contraband. Khomenei accused the United States with deception in his address.

SACA Boss Says He's "Quietly Confident" About An India Day-Night Test
The decision by Cricket Australia reiterates their committment to developing professional cricket on the Gold Coast. India and Bangladesh are the only two high-profile Test-playing nations to have not played a day-night Test yet.

Government grilled over CervicalCheck controversy after Limerick woman's battle
Ms Phelan said she did not want to see an inquiry or tribunal into the affair that would be dragged out and protracted for years. All of the other women affected would also be informed by today and given an appointment with a clinician free of charge.

Every Box Office Record Set by Avengers: Infinity War
It joins only six other films to achieve such unbelievable figures, and is now Marvel Studios' best opening weekend yet. Domestically, the film put up a cool $250 million and was celebrated in Hollywood as the biggest opening ever.

Walmart's new $10 billion dollar deal is facing a big roadblock
Walmart is retreating from Europe, merging its United Kingdom supermarket business Asda with bigger rival Sainsbury's . The deal would transform the country's supermarket industry.

Pompeo says US-Israel relations 'never been stronger,' in Middle East visit
Pompeo met earlier on Sunday with Saudi King Salman in Riyadh , after dinner on Saturday with Crown Prince Mohammed bin Salman. Pompeo assured Prime Minister Benjamin Netanyahu that Washington would support Hebrew state in Middle East's "Iranian threats".

Hamilton left in 'disbelief' with Baku victory
Vettel was demoted to second and, in attempting a gung-ho move to retake the lead, fell off the track and ended down in fourth. Vettel finished fourth, while Carlos Sainz in the Renault was promoted to fifth after the Red Bulls were out of contention.

Traded draft picks are becoming the norm
During that 14-year streak, this is the deepest the draft had gone until the first Missouri player came off the board. The general rule is a second-round pick this year is worth a first-rounder next year, and New Orleans paid that price.

Trump to face mass protests during United Kingdom visit
Donald Trump is not anxious about mass protests ruining his working visit to the U.K.in July, U.S. A Downing St spokesman said that 'Further details will be set out in due course'.

Saudi air strike kills dozens of Yemen rebels including commanders
Witnesses in Sanaa reported more Saudi-led air raids over the capital during the funeral, without reporting any casualties. Four of the missiles were intercepted, the Saudi Defence Ministry told Saudi-owned Al Arabiya TV .