Oil edges up on falling U.S. crude stocks, but global glut weighs

Ashley Carr
August 16, 2017

Libya's National Oil Corporation (NOC) said an investigation had been opened into security violations that took place in recent days at Sharara oil field, the country's largest.

Official U.S. data is released late Wednesday morning.

On the balance situation, a survey of analysts from S&P Global Platts revealed expectations of a 3.6 million drop in US crude oil inventories and a 400,000 barrel decline for gasoline.

The current prices for today had dip entering this Monday, the Western Digital Intermediate oil for September delivery was down by a whopping 2.5% or a total decrease of $1.23 before settling to the $47.59 a barrel on the New York Mercantile Exchange.

USA crude inventories probably shrank by 3.5 MMbbl last week, according to the Bloomberg survey.

Philippine PXP Energy Eager to Resume South China Sea Drilling
They said they have tasked senior officials to start negotiating on the Code of Conduct with China. The Philippines calls the framework a major step in efforts to ease potential flashpoints.

The draw compares to analyst expectations of a draw of 3.6 million barrels for the week ending August 11. "This results in a tug of war that we have witnessed all year and the final outcome is a range-bound market", said Matt Stanley, a commodities broker at Freight Investor Services in Dubai reports CNBC. While that narrowed the surplus, stockpiles were still 219 million barrels above the five-year average at the end of June, the agency said. Phil Flynn, senior market analyst for the PRICE Futures Group in Chicago, said in a daily emailed newsletter the leveling effect may be overstated because production growth isn't keeping up with demand. Worse still, this momentum is not expected to change into the first quarter of 2018 when the current OPEC deal where oil output will be cut by 1.8m bpd will have run out. U.S. shale oil production for September which includes a new regional data input, is forecast to rise by 117,000 barrels per day to 6.15 million bpd, the U.S. Energy Information Administration said.

The rising rig count hints at sustained output growth just as the world's major oil producers, excluding the United States, try to stem oversupply by trimming production.

Offsetting much of that effort, however, USA oil production has soared by nearly 12% since mid-2016 to 9.42-million barrels a day.

India now depends on OPEC countries for 86% of its oil imports, with Iraq, Saudi Arabia, Iran, and UAE its major suppliers. Even so, Citigroup Inc.'s Ed Morse says shale will win over OPEC on oil, as US drillers can survive due to hedging. The American Petroleum Institute is out with industry report this afternoon.

Other reports by My Hot News

Discuss This Article