"Looking ahead, crude oil futures prices continue to suggest that the benchmark WTI oil price will ease from current levels back to the US$50 range over the forecast horizon". Higher Nigerian output offset losses elsewhere. And shale production is booming and on course to crown America as the world's top oil producer as early as later this year. Instead, OPEC is making overtures to President Putin, in the hope that co-operation with Russian Federation will be a geopolitical lever on the U.S., but this seems unlikely to work.
Besides, OPEC and non-OPEC members also agreed to cut production volumes by as much as 1.8 million barrels per day (mbd) with OPEC members contributing 1.2mbd of that while the balance would be provided by non-OPEC members.
The 2018 federal budget, released February 27, did not have good news for the oil sector, with a forecast for lower oil prices. This indicates that the yield is higher than that of Saudi Arabia - the world's largest exporter, and a little below that for Russian Federation. "Compliance with output cuts by non-OPEC countries was 85 per cent". With U.S. production booming and the International Energy Agency predicting that expanding supply from non-OPEC countries may cover global demand growth for the next two years, speculation has increased over how long the cartel will have to curb supply.
"The comments from the IEA head about the pace of United States shale growth might have taken the wind out of the bull's sails", said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. Sure, there could be growth in the global economy and a lot of oil could be needed.More news: Apple Inc. (NASDAQ:AAPL)'s shares become key-centric, Warren Buffett
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Workers hired by U.S. oil and gas company Apache Corp drill a horizontal well in the Wolfcamp Shale in west Texas Permian Basin near the town of Mertzon, Texas, U.S., October 29, 2013.
The American Petroleum Institute (API) reported Tuesday an increase in US oil inventories by around 933,000 barrels for the week ending February 23. "Most importantly, the underlying oil market fundamentals in the early part of 2018 look less supportive for prices". "Stocks drew by 154 mb (420 kb/d) during 2017 and ended the year 52 mb above the five-year average".
"You've had the rig count grind higher", Rob Haworth, who helps oversee US$151 billion (RM590 billion) in assets at US Bank Wealth Management in Seattle, said by telephone. "In 4Q17, stocks fell sharply by 1.3 mb/d across the OECD".