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profishingrods.com May 24, 2018


Oil prices fall on signs of ample supply despite OPEC cuts

16 May 2018, 04:00 | Regina Holmes

Oil prices fall on signs of ample supply despite OPEC cuts

Oil prices fall on signs of ample supply despite OPEC cuts

The difference between the two benchmarks briefly widened to more than $8 a barrel, the widest gap since April 2015, reflecting surging US crude supplies and a greater geopolitical risk to Brent-based crudes.

U.S. West Texas Intermediate (WTI) crude futures were at $71.09 a barrel, up 13 cents and also not far off their November 2014 high of $71.89 a barrel reached last week.

In 2017, China surpassed the United States to become the world's top crude oil importer as its domestic production declined while it kept the title of world's largest oil consumer for the ninth consecutive year, and while it expanded refining capacity, and reduced restrictions on oil imports and refined oil product exports.

"U.S. oil prices have flip-flopped on a strong dollar", said Phil Flynn, analyst at Price Futures Group in Chicago.

The oil price spread that'll determine the type of crude bought by Asia in the wake of US sanctions on Iran is now in favor of American supply.

Moreover, in a monthly oil market report released Monday, the Organization of the Petroleum Exporting Countries (OPEC) raised its forecast for global oil demand in 2018, expecting the world to consume 98.85 million barrels a day, or 1.65 million barrels a day higher than a year ago.

The data poses worries that near-record high refinery runs may be short-lived.




Physical crude markets are sagging under the weight of unsold barrels of oil, while the 50-percent rise in the oil price in the previous year is encouraging major companies such as ExxonMobil, Royal Dutch Shell, Chevron, BP and Total to increase output.

"A rising oil price brings upside price risk to all commodities", Morgan Stanley said in a note to clients this week.

OPEC figures published on Monday showed oil inventories in OECD industrialized nations in March fell to 9 million barrels above the five-year average, from 340 million barrels above the average in January 2017.

Global oil supplies could be hit by the decision by the USA to pull out of the Iran nuclear deal, and also by falling production in crisis-hit Venezuela, the IEA said on Wednesday.

Iran's oil buyers continue to buy its crude, assessing the implications of the sanctions during the 180-day wind-down period.

This story has not been edited by Firstpost staff and is generated by auto-feed.



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