Oil Prices Fall After Three-Day Rally
- Author: Zachary Reyes Apr 02, 2017,
Apr 02, 2017, 23:21
Oil prices fell on Friday after a three-day rally ran out of steam, as investors waited for USA rig count data that could provide further evidence that U.S. production is continuing to grow, contributing to a global oil glut. The market is still fixated on the USA oil rig count that we know will continue to rise.
In the United States, West Texas Intermediate (WTI) crude futures were up 34 cents, or 0.7 percent, at $48.71 a barrel. In March, the contracts posted the biggest monthly losses since July as growing USA crude inventories and drilling activity counterbalanced production cuts elsewhere in the world.
OPEC, along with other producers including Russian Federation, aims to cut output by nearly 1.8 million bpd during the first half of the year.
US crude futures rose 1.5 percent to $49.09 a barrel.
Investing.com offers an extensive set of professional tools for the financial markets. May Brent oil LCOK7, -0.49% on London's ICE Futures exchange shed 26 cents, or 0.5%, to $52.87.
USA crude exports surged 12 percent in 2016 to 520,000 barrels per day and China became the third-biggest overseas destination for US crude last year, according to EIA data, up from ninth the previous year.
The U.S. Energy Information Administration said Wednesday that crude oil inventoriesincreased by 867,000 barrels last week to yet another all-time high of 534.0 million.
"In 2016, USA crude oil exports averaged 520,000 bpd, 12 percent above the 2015 level, despite a year-over-year decline in domestic crude oil production", the EIA said. The global benchmark crude traded at a $2.52 premium to WTI.
There has been a 94% compliance rate from OPEC members, but doubts on the effectiveness and sustainability of the deal kept prices in a narrow range for much of the year before the breakdown earlier in March.
In November 2016, OPEC member states reached an accord to cut oil production by 1.2 million barrels per day for the first half of 2017 to boost global oil prices.
Moscow is fully complying with the deal to cap oil production, while accurately evaluating longer-term structural developments in the market, according to Russian Energy Minister Aleksandr Novak, RT said.
UBS oil analyst Giovanni Staunovo said in a note he expects Brent to exceed $60 over three months before levelling off in six months to $60 and then retreating to $57 a barrel in 12 months, spurred by rising us shale production and higher OPEC output. Though consensus expectations are for a six-month rollover of the OPEC/non-OPEC cuts, producers have refrained from declaring a commitment to prolonging the cuts.
The EIA said US stockpiles, excluding those in the Strategic Petroleum Reserve, had increased by 900,000 barrels from the previous week, while both gasoline and distillate fuel inventories decreased during the frame.