Oil prices witness limited gain amid increasing USA oil drilling
- Author: Zachary Reyes Feb 20, 2017,
Feb 20, 2017, 19:52
Oil edged up on Monday, as investor optimism over the effectiveness of producer cuts encouraged record bets on a sustained price rise, although growing US output and stubbornly high stockpiles kept price gains in check. The price of March futures for West Texas Intermediate (WTI) oil grew by 0.84 percent to $53.85 per barrel. OPEC's production cuts are now focusing on mostly heavy and medium grades of crude oil, which opens the door for the U.S.to provide these commodities to countries in need, including China.
Similarly, price of each barrel of Iranian light and heavy crude oil also experienced a drop in the dealings leading to February 10, 2017.
"There is still a general consensus that the OPEC/non-OPEC agreement helps supply to get in line with demand".
"Sustained gains above $55 a barrel, and a hoped-for rally to $60 a barrel, [are] both proving incredibly tough nuts to crack", said Jeffrey Halley, senior market analyst at futures brokerage Oanda in Singapore.
OPEC and non-OPEC producers agreed to cut their production by 1.8 million barrels a day in November, while latest reports showed that OPEC producers have slashed nearly 90% of their agreed supplies in the first month of this year.
Saudi Arabia's crude oil exports in December fell to 8.014 million bpd from 8.258 million bpd in November, official data showed on Monday.
According to a survey by Reuters published on January 31, Iran has increased its oil output by 20,000 bpd in January after the country was exempted from the OPEC cuts.
"Assuming the United States oil rig count stays at the current level, we estimate USA oil production would increase by 405,000 (barrels per day, or bpd) between 4Q17 and 4Q16 across the Permian, Eagle Ford, Bakken and Niobrara shale plays", Goldman Sachs said in a research note. Transactions on Monday will be booked Tuesday for settlement purposes because of the U.S. Presidents' Day holiday.