US oil production seen thwarting OPEC effort to boost prices

Late last month, OPEC said it would extend an 1.8 million-barrel-a-day cut to oil output by nine months, though March 2018, after the November deal failed to fully clear a global oversupply in oil, which has been keeping prices relatively low.

Crude prices have fall by more than 10 percent since late May, pulled down by an supply glut that persists despite a move led by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by nearly 1.8 million barrels per day (bpd) until the end of the first quarter of 2018.

The Paris-based IEA said production outside the Organizationof the Petroleum Exporting Countries would grow twice as quicklyin 2018 as it will do this year, when OPEC and 11 partnernations have restrained output.

OPEC, and some non-OPEC producers led by Russian Federation, agreed last month to extend supply curbs for nine months through to the end of March 2018.

Market sentiment was already weak before the EIA readings, after both the global oil cartel and the top energy watchdog, the International Energy Agency, noted that the global supply growth rate continues to outpace demand and will do so until next year at least.


According to Wednesday data from the EIA, crude-oil stockpiles decreased by 1.7 million barrels in the week ended June 9, falling short of expectations for a 2.6 million barrel drop from analysts and traders surveyed by the Wall Street Journal.

Both crude oil benchmarks have lost all the gains made at the end of a year ago after the oil cartel agreed with other big producers to cut output in an effort to prop up prices.

It's a "battle between sheikhs and shale", Dudley said, referring to the frantic efforts by the major oil producing nations of the world in the middle east to prop up crude oil prices, which are under relentless pressure from rising shale oil and gas production in the United States and record stockpiles. That was despite the ongoing output cuts by the Organization of the Petroleum Exporting Countries and other producers including Russian Federation.

OPEC now expects USA production to increase by 800,000 bpd in 2017. Despite "robust demand", Fesharaki told CNBC that "there is too much oil on the market". The goal is to reduce crude inventories to their five-year average.

"The market is in trouble", said Tamas Varga, analyst at London brokerage PVM Oil Associates.


WTI was trading up 0.8% at $46.45 per barrel at 3:11pm EST-more than $1.50 per barrel lower than a week ago-with Brent trading at $48.74, compared to $50.05 per barrel last week.

Efforts to combat the oil glut have not been helped by figures this week that showed Opec as a whole increased production in May because of higher output by Nigeria and Libya, which are not covered by the recent cuts deal.

Saudi Arabia's oil exports are expected to fall below 7 million barrels per day this summer, according to industry sources familiar with the matter, and Russian oil exports were seen as broadly flat in the third quarter.

Overall 2017 average annual demand growth was left unchanged at 1.27 million b/d.



Popular
  • Proud papa Johnson poised to defend US Open title

    Open victor , and number nine Rickie Fowler , zeroing in on a maiden major, will spearhead the American charge along with Johnson. If we had a sudden-death play-off one player would have won, if it's a three or four-hole play-off another player would have won.

    Chris Coleman still confident on World Cup qualification

    It doesn't always come off but as of late this is the kind of game that we love when you're up against it in a different country. But I think the great thing about going back out there and having another chance is that we can see how far we've come.
    Ambassador Haley: 'President Trump Believes the Climate Is Changing'

    Ambassador Haley: 'President Trump Believes the Climate Is Changing'

    But it also galvanized defiant state and local government leaders in many blue states throughout this country. Mr Trump's move was "a big mistake", said Donald Tusk, one of the European Union's top officials.
  • Clinging On To Her Job, Britain's May Appoints New Ministers

    Instead she stuck to her formula - "Hard Brexit", tough-sounding language, "it's all about immigration". A suicide bomber blew himself up outside a pop concert in Manchester on May 22, killing 22 people.

    Apple debuts HomePod speaker to bring Siri into the living room

    REUTERS/Stephen LamPhotographers take a close look at the Apple HomePod which the company unveiled at the WWDC 2017 in California. The free software update for mobile devices, iOS 11, is expected in September, when Apple typically releases new iPhones.

    Apple debuts HomePod speaker

    The big reveal at the company's Worldwide Developers Conference on Monday was the HomePod , a $350 voice-controlled speaker. The research firm IDC says Apple and Xiaomi each has a worldwide market share of almost 15 per cent in the first quarter.
  • Doubts over my future drove me on, says Rafael Nadal

    Doubts over my future drove me on, says Rafael Nadal

    The 31-year-old lost only 35 games in seven matches and won the title without dropping a set for the third time. She is taking the rest of this year off because she is pregnant.
    Apple unveils 'HomePod' speaker, first new product in years

    Apple unveils 'HomePod' speaker, first new product in years

    This display will be powered by AMD Vega graphics cards that will be able to provide up to 22 Teraflops of computing performance. Featuring next-generation Intel Xeon processors up to 18 cores, iMac Pro is created to handle the most demanding pro workflows.

    IPhone to add new feature that will stop texting while driving

    This could be a tacit admission by Apple that it's too late in the game for yet another smart speaker - at least in name. It is supported by millions of iPads and iPhones, making it the largest AR Platform in the world, said Federighi.
  • U.S.  evangelical green groups pan Trump's climate accord exit

    U.S. evangelical green groups pan Trump's climate accord exit

    Pruitt insists the USA has nothing to apologize for, having already reduced its own carbon emissions to 1990's levels. The new French president, Emmanuel Macron, says the rest of the world will press ahead without the United States.

    Golden State one win away from National Basketball Association glory after downing Cavs again

    The Warriors thought they were carving out their place in history when they set a record with 73 wins last season. He scored 39 points, hauled in 11 rebounds, dished nine assists while logging one steak and one block to boot.
    Saints to report Liverpool

    Saints to report Liverpool

    Van Dijk signed a new six-year contract last year, having joined Southampton from Celtic for £13 million in September 2015. On Tuesday, reports surfaced that Southampton believe Liverpool illegally tapped-up the 25-year-old Dutch defender.

CONNECT