Oil prices decline on rising United States stockpile

17 Noviembre, 2017, 03:28 | Author: Arnold Perez
  • Oil prices decline on rising United States stockpile

Tuesday's and Wednesday's falls mean that Brent is now down by nearly 5 percent since hitting 2015 highs a week ago, ending a more than 40-percent rise between July and early November.

Brent crude oil LCOc1 was up 20 cents a barrel at $62.07 by 0830 GMT.

But on Tuesday, the International Energy Agency lowered its outlook for demand growth in both 2017 and 2018, in part because of warmer than expected winter weather.

United States crude oil production hit a record of 9.65-million barrels a day, meaning output has risen by nearly 15% since their most recent low in mid-2016.

"Using a scenario whereby current levels of OPEC production are maintained, the oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, surplus of 200,000 bpd in 2Q18", the agency said.

Oil prices declined on Wednesday after report showed an increase in USA crude stockpile.

Global oil demand growth is likely to have slowed to 1.3 million bpd in the third quarter of this year, in part because of the impact of hurricanes Harvey and Irma in August and September on USA consumption. The energy policy adviser to developed nations knocked down its growth forecast by 100,000 barrels a day for each year, projecting that oil markets will remain oversupplied in the first half of 2018. On the supply side, rising US output also pressured prices.

USA oil production has already increased by more than 14 percent since mid-2016 to 9.62 million bpd and is expected to grow further.

Consumer price inflation minus food and energy rose slightly in October while retail sales were a bit higher, according to government data.

OPEC and non-OPEC exporters including Russian Federation agreed a year ago to cut crude output by 1.8 million BPD between January this year and March 2018 to bolster prices.

Traders said the IEA's outlook would put pressure on producer club OPEC to keep restraining output in order to defend crude prices, which most its members rely on for revenue.

Oil ministers have signalled that they are likely to extend the agreement, possibly until the end of next year. The satellite imaging analysts said in a tweet that they had identified 624 floating roof storage tanks in Saudi Arabia, nearly twice as many as industry databases have.

"On global oil demand, longer term questions persist around the driving forces, with the oil market contending with deindustrialisation, a global reduction in carbon emissions and an increasing shift to renewable technologies", said Graham Bishop, investment director at Heartwood Investment Management.