OIL PRICE: ABOVE $46 YET
REUTERS, BLOOMBERG, OILPRICE - Oil edged lower toward $47 a barrel on Wednesday after an industry report said U.S. inventories increased, reviving concerns that a three-year supply glut is far from over.
The American Petroleum Institute (API) said on Tuesday U.S. crude inventories rose by 851,000 barrels last week, while analysts expected a decline. Inventories of gasoline and distillates also increased, the API said.
"There appears to be no end to the bearish news on the oil market," said Carsten Fritsch, analyst at Commerzbank. "This is likely to add fuel to doubts that any process of market tightening is underway."
Brent crude LCOc1 was down 9 cents at $46.56 a barrel at 1033 GMT. It reached a seven-month low of $44.35 on June 21. U.S. crude fell 17 cents to $44.07.
A rise in U.S. stocks would suggest global supplies are still ample despite the effort led by the Organization of the Petroleum Exporting Countries to cut output by 1.8 million barrels per day (bpd) from January 2017.
Top exporter Saudi Arabia and the other producers are trying to get rid of a supply glut which prompted prices to slide from above $100 a barrel in mid-2014.
"The U.S. crude oil stock build is not huge but it is still a build and that does not go in the direction of the Saudi rebalancing," said Olivier Jakob, analyst at Petromatrix.
OPEC and its allies agreed on May 25 to extend the supply cut into 2018, but Brent has fallen from as high as $54 since then on rising production from the United States and from Nigeria and Libya, two OPEC members exempt from cutting output.
Nonetheless, some analysts believe the sell-off is overdone.
Traders will be awaiting the U.S. government's official supply report for confirmation of the API figures. The Energy Information Administration releases its report at 1430 GMT.
Ian Taylor, head of the world's largest independent oil trader Vitol, said Brent will stay in a range of $40-$55 a barrel for the next few quarters as higher U.S. production slows a rebalancing of the market.
Analysts at JBC Energy in a report saw room for prices to recover.
"While the physical crude market remains steady at best, it is worth noting there is now significant room for speculative support for prices to develop if a catalyst were to emerge," JBC said.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.