OPEC lowers forecast for Russia's oil production in 2018

EIA said it was too early to assess the impact of Hurricane Irma, which made landfall on September 10.

Although Hurricanes Harvey and Irma are expected to slow USA oil demand growth in the third quarter this year, "OECD demand growth continues to be stronger than expected, particularly in Europe and the United States", the IEA said today.

OPEC's crude oil exports fell by 920,000 bpd to 25.19 MMbpd in August 2017-compared to the previous month. The spread could push USA producers to find more export opportunities for US crude.


Investors anticipated a rise in USA crude inventories ahead of official data due later on Wednesday.

"Even if bloated global oil stockpiles continue to decline through this year, OPEC will still fall short of its objective to reduce oil inventories to their five-year norm by the end of 1Q2018".

West Texas Intermediate crude for October delivery CLV7, +0.87% jumped 50 cents, or 1%, to $48.73 a barrel, setting it on track for the highest settlement since last Thursday. The IEA raised its global oil demand forecast by very strong 1.6 million barrels a day while admitting that OPEC compliance to production cuts have improved.


On the other hand, supplies of gasoline are down by about 2.0 million barrels and distillates are expected to drop 1.5 million barrels. The exporters of the group have been looking to drive down global crude stockpiles and drain away oversupply from the market.

The EIA also said refinery crude runs fell by 394,000 barrels per day. "If you look at their numbers from March to July, inventories in the OECD, accounting for seasonality, have been going down".

Earlier, the Saudi Arabian Energy Minister held discussions with his Venezuelan, Kazakhstan counterparts for a possible extension of the supply cut deal beyond March next year. Keeping that aside, U.S. oil inventories have declined by ~70 million barrels since the end of March. The cartel, in cooperation with other oil producers including Russian Federation, set production quotas since January in an effort to drain the global overhang of supply.


Supply is also said to have been hampered by Hurricane Harvey in the US, which caused refineries to shut. "Currently as far as Harvey is concerned, we do not see that there is a major physical shortage of oil which (would) make us consider to release stocks", Reuters reported the chief of the Paris-based agency, Fatih Birol as saying.


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