En Español

Very usefull links


News links




Dow Jones

Oil price



Views and News





Crude prices Monday dip as markets remain bloated despite OPEC-led cuts



Petroleumworld.com 02 14 2017

Oil prices dipped on Monday on signs that global fuel markets remained bloated despite OPEC-led crude production cuts that have been more successful than most initially expected.

Brent crude futures were trading at $56.55 per barrel at 0035 GMT, down 15 cents from their previous close.

West Texas Intermediate (WTI) crude futures were down 12 cents at $53.74 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017 in a bid to rein in a global fuel supply overhang.

There was widespread scepticism that all producers would actually make the promised cuts, but compliance with the announced reductions is now estimated to be around 90 percent.

"Traders will be keenly awaiting the release today of OPEC's monthly report. If production cuts are coming through as suggested, we should see oil prices push higher," ANZ bank said on Monday.

While traders said that crude was well supported in the lower to mid-$50s per barrel due to the curbs, they pointed to a host of reasons that were preventing prices from rising further unless production is cut deeper or for a longer period.

In the United States, rising drilling activity is pushing up production and undermining OPEC's efforts to reduce output.

Drillers added eight oil rigs in the week to Feb. 10, bringing the total U.S. count to 591, the most since October 2015, Baker Hughes said on Friday. RIG-OL-USA-BHI

During the same week last year, when prices were around $30 per barrel, there were just 439 active oil rigs.

In Russia, which is participating in the cuts, there are signs that output may be falling but that exports remain high, as its producers shield their core export markets at the cost of lower domestic supplies or by cutting into inventories.

Given these trends, analysts say that OPEC might have to extend its cuts for a longer period than the currently planned first half of 2017.

But since global oil demand is expected to rise be between 1.3 million bpd and 1.5 million bpd in 2017, OPEC's conundrum is that the longer and deeper it cuts, the more it cedes market share to competitors, as seen in the two world's biggest oil consuming markets.

In the United States, OPEC is facing the rising flood of shale driven production. In China, OPEC's de-facto leader Saudi Arabia has already been overtaken by Russia as the biggest oil supplier.

Story by Henning Gloystein; Editing by Joseph Radford from Reuters.

We invite all our readers to share with us
their views and comments about this article

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels









Contact: editor@petroleumworld.com,

Editor & Publisher:P.Ohep F. /Producer - Publisher:P.Ohep F./
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2016, Petroleumworld   / Elio Ohep Fitzgerald- All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.