Oil rises, but growing United States output threatens rally

Regular data on US energy market conditions are delayed this week because of the federal holiday Monday.

Oil traders for the last two weeks have shrugged off reports that US stockpiles are brimming at their largest levels ever recorded, as the market continues to bet that crude prices will climb higher.

OPEC cuts have spurred a speculative move into crude oil that has pushed prices towards the top of their recent ranges.

"Stocks are still very high, and it will take some time for the implementation process to go through", he said.

Net long USA crude futures and options positions are also at a record high, US data showed on Friday.

In the USA oil production is rising and according to research from Argus both the productivity per new well is going up while the break-even cost is coming down. "It's work in progress, but the trend I think has commenced".

Barkindo said it was too early to say if the supply cut, which lasts for six months from January 1, would need to be extended or deepened at the next OPEC meeting in May.

By contrast, South Korea's imports of crude oil from Saudi Arabia dropped by 17.3 percent in January compared to December 2016, to 785,084 barrels per day (bpd), because the kingdom is engaged in the OPEC cutbacks. Barkindo said the nation has pledged to keep cutting. "In the month to come, we will see even higher numbers from both sides".

Canada's main stock index reached a new record high on Tuesday, led by Restaurant Brands International Inc after it announced an acquisition, while heavyweight financial and energy shares also gained as oil prices rose. The committee is scheduled to hold a technical meeting in Vienna starting Wednesday.

Rising supply from US, Libya and potentially Nigeria is now being met by a successful production cut by other Opec and non-Opec members.

While OPEC production will be monitored through several secondary sources, including S&P Global Platts, non-OPEC output is measured through official country-supplied statistics. They're holding record levels due to their expectations of supply cuts by OPEC and non-OPEC members. If not, optimism about further recovery in oil prices could evaporate.

He said upstream capital expenditure budgets had been slashed some $300 billion globally over the last two years.

The country's heavy oil price was reported $52.19 on average since the beginning of 2017 until February 10.

  • Zachary Reyes