OPEC crude output falls in December '18

Share

The US could soon overtake Saudi Arabia in the production of crude oil which is now at peak capacity.

Futures rose as much as 1.7 percent in NY, with gains over the past three weeks totaling about 16 percent.

Meanwhile, oversupply worries have eased as the Organization of the Petroleum Exporting Countries (OPEC) and other major crude exporters including Russian Federation agreed past year to cut supply starting this month to curb a global glut.

Although the agency forecasts that oil prices will remain lower than during most of 2018, the prediction includes some increase in prices from December 2018 levels in early 2019 to keep up with demand growth and support the increased need for global oil inventories to maintain five-year average levels of demand cover. BNP Paribas sees Brent Crude rising to $65 and then aiming at $70 a barrel, Tchilinguirian said.

It was the biggest decline since February 2016, as drillers reacted to the 40 percent plunge in US crude prices late past year. The contract lost 24 cents on Thursday.

Brent crude oil futures LCOc1 were down 13 cents at $62.57 a barrel by 1207 GMT, while US crude futures CLc1 lost 10 cents at $53.70 a barrel.

More news: Kim summit: Second meeting by February-end
More news: Impressive Arsenal beat Chelsea to stay in top four race
More news: Thousands join women's marches for third year

Faster-than-expected growth would leave the market short of crude, hedge funds racing to rebuild bullish positions, and propel prices higher quickly, allowing OPEC to relax some of its recent cutbacks.

Production in the US will rise by 1.3 million barrels a day this year, the IEA said. It's the biggest cut since the organization kicked off a previous round of curbs in early 2017. Prices got another boost later, on expectations that USA sanctions on Iran would cut supplies to major importers including China, India and Japan.

US West Texas Intermediate (WTI) crude futures were down 11 cents, or 0.2 percent, at $53.69 a barrel. While nationwide inventories dropped for a sixth time in seven weeks, stockpiles of gasoline and distillates rose by more than twice the amount estimated in a Bloomberg survey.

US crude oil stocks fell more than expected last week, while gasoline and distillate inventories rose more than forecasts, the Energy Information Administration said on Wednesday.

Ashton Whiteley analysts say prices have been negatively impacted by disappointing trade data out of China which revealed a decline in imports and exports as the trade tariffs imposed by the USA during the course of past year begin to take their toll.

Opec secretary-general Mohammed Barkindo last week said the organisation remains "acutely conscious" of the importance of a sustainable, stable oil market for the global economy. Distillate fuel production decreased for the same period, averaging 5.4 million barrels per day.

Share