Investors bet Trump climate withdrawal to boost U.S. drilling
- Author: Zachary Reyes Jun 03, 2017,
Jun 03, 2017, 15:37
Analysts at Rystad Energy are predicting us crude oil output could top an old record set in November 1970 by the end of the year.
Crude oil prices came under pressure in the overnight session on word that Libyan oil was again making a comeback.
But industry data on USA oil inventories from the American Petroleum Institute (API) late on Wednesday helped the market to pare those losses. The price for Brent crude oil, now in the August contract, was down 0.1 percent minutes before the opening bell to $50.71 barrel.
Before the start of trading in NY, the U.S. Energy Information Administration reported gasoline demand in March was down year-over-year for the third month in a row, suggesting some consumer factors may not be eating away at the supply-side strains.
Brent crude futures for July LCOc1 gained 58 cents to touch $51.34 a barrel, while the US West Texas Intermediate crude CLc1 futures climbed 64 cents and traded at $48.96, reported Reuters. "U.S. crude oil exports were a strong contributor to the crude oil stock draw".
Sechin, a close ally of President Vladimir Putin, expects shale oil output to increase by about 1.5 MMbpd in 2018, close to the entire cut targeted by the Organization of Petroleum Exporting Countries and its allies including Russian Federation.
Today's falls in oil extended those seen on Tuesday, when bears sold on doubts that cartel Opec's extended production cuts would alleviate the global glut. In fact, USA crude inventories have fallen for eight straight weeks, declining by a sharp 6 million barrels last week, an indication that OPEC's strategy may eventually work in its favor.
Part of the problem is that production is increasing in members such as Libya and Nigeria, which are exempt from making cuts as they restore output after internal strife, said BP Chief Executive Officer Bob Dudley.
Traders are waiting for the latest data on supply and demand factors from trade groups and the U.S. Energy Information Administration.
The U.S. almost broke oil production records in April 2015 when output hit 9.6 million barrels a day.
Historical patterns also support a demand boost; for the past three years second half oil demand has averaged 1.7 million bpd above the first half. OPEC aims to lower this to just under 2.8 billion barrels, the average level over the past five years. Throughout the first quarter, USA shale output saw healthy gains, crude exports skyrocketed, imports from OPEC actually increased, and crude inventories rose-all of which call into question the effectiveness of the cut.