Tuesday, 26 September 2017
Latest news
Main » OPEC Report: Could US Crude Oil Break above the $50 Mark?

OPEC Report: Could US Crude Oil Break above the $50 Mark?

15 September 2017
OPEC Report: Could US Crude Oil Break above the $50 Mark?

"In addition, the recent drop in oil prices has been considerably sharper than the decline in prices for other commodities - which is in stark contrast to, for example, the oil price collapse of 1985-1986 when all commodity prices saw a steep decline".

On the other hand, Hurricane Harvey and Irma have caused around 900,000 barrels per day drop in oil demand.

Geoffrey Craig, the oil futures editor for Platts, said markets will be tested by what could be a steady buildup in US crude oil inventories. Gasoline inventories fell more than anticipated-by 7.896 million barrels for the week ending September 8, against an expected draw of 4.0 million barrels.

"Outright benchmark crude prices gained in August, reflecting higher demand in the northern hemisphere and tight physical markets for oil products", the IEA said.

The West Texas Intermediate for October delivery was up 1.07 USA dollars to settle at 49.30 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery rose 0.89 dollar to close at 55.16 dollars a barrel on the London ICE Futures Exchange.

The meeting with del Pino also touched on the recent natural disasters in the United States which had an effect on global crude markets, added Minister Al-Marzouq.

USA crude production rebounded last week to an average of 9.4 million barrels per day from 8.8 million bpd a week earlier, entirely the result of increases in the lower 48 states.

Iran's own data point to larger cuts.

If these weren't enough, the U.S. Energy Information Administration lowered its oil production forecast for this year and the next by 1% and 0.7%, respectively.

Within industrialised countries that are members of the OECD oil "product stocks are now only 35 mb above the five-year average", the IEA said in its monthly report.

Florida, which was hammered by Irma, is the No. 3 consumer of gasoline among USA states, according to Energy Department figures; neighboring Georgia ranks seventh.

The IEA on Wednesday raised its estimate of 2017 world oil demand growth to 1.6 million barrels per day (bpd) from 1.5 million bpd.

The price move higher also "reflects a little more confidence that the refiners are recovering", said James Williams, president of energy researcher WTRG Economics near Russellville Still, the oil market may continue to chop around as there is some lingering uncertainty as to how much crude is actually being processed by these refiners, he said.

"Without inventory normalization, there can be no sustained price recovery", they wrote.

OPEC and non-member producers are seeking to extend their output cut agreement.