OIL PRICES: OVER $50
REUTERS - Oil prices slipped back to three-month lows on Wednesday after data showed U.S. crude inventories rising faster than expected, piling pressure on OPEC to extend output cuts beyond June.
A deal between the Organization of the Petroleum Exporting Countries and some non-OPEC producers to reduce output by 1.8 million barrels per day (bpd) in the first half of 2017 has had little impact on bulging global stockpiles of oil.
Benchmark Brent crude was down 82 cents at $50.14 per barrel at 0936 GMT (5:36 a.m. ET), after dropping to $50.05, its lowest level since OPEC announced on Nov. 30 its plan for cuts. The deal with non-OPEC states was reached in December.
U.S. light crude was down 70 cents at $47.54 a barrel, also slipping toward a three-month low.
"The lower the price goes, the higher the pressure on OPEC to extend cuts," Commerzbank analyst Carsten Fritsch said.
Sources have said OPEC is inclined to extend but wants backing from non-OPEC producers, including Russia, even though such countries have yet to deliver fully on existing cuts.
On Tuesday, the American Petroleum Institute reported U.S. inventories climbed by 4.5 million barrels to 533.6 million last week, a bigger rise than the 2.8 million analysts forecast.
Investors now want to see whether Wednesday's figures from the Energy Information Administration, a unit of the Department of Energy (DoE), confirm the rise.
"A look below $50 (for Brent) is quite possible today if DoE data show a similar pattern, but it's impossible to say how far below $50," Commerzbank's Fritsch said.
U.S. shale oil producers have been adding rigs, pushing up the country's oil production to about 9.1 million bpd, from around 8.5 million bpd in late 2016.
"OPEC's market intervention has not yet resulted in significant visible inventory drawdowns, and the financial markets have lost patience," U.S. bank Jefferies said in a note.
The bank said OPEC-led cuts would start having an impact in the second half of 2017, but added that U.S. crude production was expected to grow by 360,000 bpd in 2017 and 1 million bpd in 2018.
U.S. bank Goldman Sachs warned its clients in a note this week that a U.S. shale-led production surge "could create a material oversupply in 2018-19".
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.