Wednesday, 13 December, 2017

Oil prices set sights on longest streak of gains in 10 months

OPEC Output Hits 2017 High OPEC Output Hits 2017 High
Juana Turner | 01 July, 2017, 00:35

Data this week, meanwhile, showed USA crude oil production declined about 100,000 barrels per day for the biggest decline so far this year.

Both benchmarks ended the first half of 2017 with drops of more than 14 percent since December 30, 2016, the largest drop since Brent and US crude fell about 19 percent in the first half of 1998.

AT 0600 GMT, August WTI crude oil is trading $45.21, up $0.28 or +0.62% and September Brent crude oil is at $47.89, up $0.26 or +0.55%.

Oil prices have increased to a two-week high following a fall in weekly U.S. production, which eased concerns about supply glut in the global market.

One Libyan oil source said NOC was repairing several leaks in pipelines that connected to the Es Sider and Zueitina export terminals.

"There are two key drivers".

Oil prices are being supported by the data that oil reserves at the largest US terminal in Cushing dropped by 0.3 million barrels, amounting to 60.8 million barrels. "We could see more gains if there is a further drop in oil output, and the other factor is a weaker United States dollar". A massive output cut was a massive way on skimping over the oil supply glut last week which steered prices on a 10-month low.

Prices have rebounded after official data showed total USA crude production dropped (http://www.marketwatch.com/story/crude-oil-price-falls-risks-snapping-win-streak-as-oversupply-concerns-bubble-again-2017-06-28) by 100,000 barrels a day last week, though some saw the fall as a temporary in the wake of a storm that passed through the Gulf of Mexico. "It is thus doubtful whether (the) price rise will really prove lasting".

The price for Brent crude oil was up 0.78 percent at 9:15 EDT to $48 per barrel.

The survey of 36 economists and analysts predicted Brent crude would average $53.96 per barrel in 2017, down from the $55.57 per barrel forecast in the previous poll, continuing the trend of gradually lower forecasts each month this year.

"The approach adopted so far by OPEC, akin to a central bank, has ultimately proved self-defeating by cutting too little but reassuring too much, " according to Goldman. For example, the combined production from Libya and Nigeria, the two OPEC members not subject to the agreed cuts, rose... from last November.

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