OIL PRICES: ABOVE $51 AGAIN
REUTERS, BLOOMBERG - Oil prices dipped on Thursday, weighed down by a general sentiment of globally bloated markets, though traders said that prices seemed to have found support around current levels.
U.S. West Texas Intermediate (WTI) crude oil futures were trading at $49.37 per barrel at 0644 GMT, down 25 cents, or 0.5 percent from their last close. WTI has lost around 8.5 percent in value from its April peak.
Brent crude futures, the international benchmark for oil prices, were at $51.63 per barrel, down 19 cents, or 0.37 percent. Brent is almost 9 percent below its April peak.
Traders said the falls in recent weeks were due to a realization that global oil markets remained oversupplied, despite efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to cut output by 1.8 million barrels per day (bpd) during the first half of the year to tighten the market and prop up prices.
"It is clear that the world has plenty of oil in stock, making OPEC's life that much harder ahead of its June production cut rollover date," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.
While the United States reported a drop in its commercial crude oil stocks on Wednesday, albeit from near-record highs, its gasoline inventories surged as refiners produced more fuel than the market could consume.
Meanwhile, U.S. crude oil production continued its relentless rise, and is now up 10 percent since mid-2016 at 9.27 million bpd, at comparable levels to the peak oil glut between late 2014 and early 2016.
Rystad Energy expects U.S. shale oil output to grow by 100,000 barrels per day (bpd) each month for the rest of this year and into 2018 if oil prices hold around $50-$55 a barrel, well above estimates by the U.S. Energy Information Administration for monthly gains of about 29,000 bpd in 2017 and 57,000 bpd in 2018.
"We see a risk for a weaker oil price towards the end of the year ... because shale is delivering so much oil and OPEC might fight back," Jarand Rystad told Reuters.
Still, with an expectation that OPEC would lobby for an extension of the production cuts to cover all of 2017, analysts said there was support for prices around current levels.
Reuters technical commodities analyst Wang Tao said that "Brent oil looks neutral in a range of $51.30-$52.32 per barrel."
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PLATTS - The quality of Russia's key Urals crude exports towards Europe will continue to fall next year as more of the country's low-sulfur oil flows are diverted eastward to China, Russian national oil pipeline operator Transneft warned.
FT - OCI — the world’s third-largest polysilicon maker by capacity and South Korea’s biggest — this month reported a 3,373 per cent increase in operating profit to Won78.7bn ($72m) for the July-September quarter, its best performance in five years. Rival Hanwha Chemical saw third-quarter net profit jump 25 per cent to a record Won252bn.
U.S. Rig Count is up 330 rigs from last year's count of 593, with oil rigs up 273, gas rigs up 58, and miscellaneous rigs down 1 to 0. Canada Rig Count is up 41 rigs from last year's count of 174, with oil rigs up 13, gas rigs up 30, and miscellaneous rigs down 2 to 2.