Oil prices fall over 1 percent on recovery in U.S. output

Oil prices fall over 1 percent on recovery in U.S. output

OPEC and a number of non-OPEC countries, including Russian Federation, cut a deal in November 2016 aimed at decreasing global oil production by 2 percent. Most analysts are betting that oil prices will remain well-supported and so the market is not expecting steep or early declines.

"The [production] cut in 2019 should be seen positively in the market".

That sets 2018 up to be very good for oil prices.

On 30 November previous year it was announced that the oil price cut agreement would be extended until the end of 2018 in an effort to support oil prices.

It kept its oil demand growth estimate for 2018 unchanged at 1.3 million bpd, down from 1.6 million bpd in 2017, mainly due to the impact of higher oil prices and changing patterns of oil use in China.

In a monthly update, the rich world's energy watchdog said USA oil output was set for "explosive" growth in 2018, together with "substantial" gains in Brazil and Canada that would more than offset steep declines in Venezuela and Mexico.

"As we approach the re-balancing by the end of 2018, we need to extend the framework but not necessarily in the production levels", Al-Falih said.

As a result of lower Venezuelan production, the IEA said OPEC's crude output in December fell to 32.23 million bpd, boosting the group's compliance with a deal to curb output to 129 percent. "We're uncertain that the pace of inventory drawdown will continue in coming months". OECD commercial stocks declined for the fourth consecutive month in November, by 17.9 million barrels, with a large fall in middle distillates, said IEA. "The market is still sensitive to geopolitical developments". The government ministers had a meeting in Oman earlier, discussing the introduced quotas and the situation on the oil markets.

Oil prices have risen from around $45 a barrel in June to over $70 a barrel this month in part because of the group's agreement to reduce the world's oil production by about 1.8 million barrels a day, or almost 2% of global output. OPEC's message to the world, he said, should be "this is something that is here to stay". Thus, we figure that with the reduction in the United States inventories and OPEC supply, the global oil markets will have enough elbow room to accommodate the growing United States oil supply and will take some time to go into another downturn.

The normal seasonal move is an increase - which happens about two-thirds of the time.

He said a January 21, 2018 committee meeting of some OPEC and non-OPEC ministers in Oman would focus on reviewing adherence to the cuts, adding that compliance in December was at 125% (from 106% in 2017), reflecting non-OPEC countries' staying true to their commitments on production cuts.

Helima Croft, head of commodity strategy at RBC Capital says "the outlook for crude is constructive", and she has less fear about the growth of U.S. production mainly because, "there's a very healthy demand picture" ahead for the year, especially if OPEC keeps the agreement in place for the full year.



Related Posts

Philadelphia Eagles: Trent Cole to retire with team on Christmas
At worst, this team will be 13-3, which is nothing short of awesome when you think about everything they've had to deal with. Cole will retire second in Eagles history behind the great Reggie White with 85.5 sacks, almost 40 short of White's record .

NFC Championship Game Preview: Minnesota Vikings vs. Philadelphia Eagles
The Rams and Eagles both made trades to climb to the top of the draft order with the intent of selecting a quarterback . Minnesota had jumped out to a 17-0 lead before relinquishing it to future Hall of Fame quarterback Drew Brees.

Federer in Australian Open 2nd round
Halep next plays Lauren Davis . "If he win tonight, I have one more chance to play with a great player in the world", Chung said. Another unexpected loss at a major had the highly touted Zverev admitting he may have a problem. "Definitely not physical, so".

Manchester City vs. Newcastle 2018 live stream
Additionally, Liverpool had to win the ball in the air. "It's such a big game against such a big club and such a big team". Mourinho has rarely attempted to goad the Manchester City manager, and Guardiola doesn't seem prepared to respond anyway.

US government shuts down, over 1000 sent on unpaid leave
An irate-sounding Ryan said on the House floor that the shutdown was pointless but it was important to dissect why it happened. Despite enjoying a Republican majority in both houses of Congress, President Donald Trump blamed Democrats for the shutdown.

Tom Brady Drops Epic Hype Video For Patriots-Jags AFC Championship Game
With those catches he averages a massive 15.7 yards per catch. "I don't think I can lean on him anymore, because I'm a big guy". Daboll has roots in Western New York, and so even if the Patriots had him on their radar, I'm not sure it would have mattered.

Vikings request trademark for Minneapolis Miracle
Foles has been a big story this week, of course, as the national media have told his up-and-down-and-now-up NFL life story. The key to the Eagles defense is the front four of ends Graham and Vinny Curry, and tackles Fletcher Cox and Tim Jernigan.

Paps Congratulate Kanye On His Baby Girl Chicago West's "Superstar" Name
The rapper and the reality star chose to use a carrier after Kim suffered pregnancy complications with her two older children. Some followers weren't impressed by Kim's Instagram post with one commenter writing, "Come on kim you're a mother of 3".

Missouri congress members weigh in on possible government shutdown
A phone recording for the site on Friday said the grounds remain open for winter hiking and walking from dawn until dusk. The policy sparked a public outrage when veterans were turned away from the World War II Memorial in Washington.

Futures Pointing To Mixed Open On Wall Street
Investors were sizing up the latest company earnings and deal news after returning from a long holiday weekend. The benchmark KOSPI shed 6-points, or a quarter-of-a-percent to close at 2,515.4-3.

© 2015 Stocks News Daily. All Rights reserved.