> OPEC and other exporters such as Russia have agreed to keep production almost ...

World: OPEC and other exporters such as Russia have agreed to keep production almost ...

2017/06/15

Oil fell on Wednesday next reports showed world supply was rising and US crude inventories were still increasing, raising concerns the market could remain oversupplied for longer than expected.

Brent crude oil fell by 28 cents to $48.44 a barrel by 1330 GMT, while US crude futures were down 29 cents on the day at $46.17.

Crude prices have fallen additional than 10 % since late May, pulled down by heavy world oversupply that has persisted despite a move led by the Organization of the Petroleum Exporting Nations to curb production.

OPEC and other exporters such as Russia have agreed to keep production almost 1.8 million barrels per day (bpd) below the levels pumped at the end of last year and not to increase output until the end of the initial quarter of 2018.

But adherence to the cuts is under scrutiny and the producer group said this week its output rose by 336,000 bpd in May to 32.14 million bpd.
Increasing output

Oil stocks are near record highs in some parts of the world, and producers outside the OPEC transaction are increasing output.

Some analysts are not ruling out that a rapid drawdown in inventories could take place.

“Balancing .. is taking longer. But at some point, investors may be surprised to see that supply and request is in balance and as any minute at this time as world inventories start to normalize and come down to the five-year average, again (they) may start to worry that we may even have a shortage in the market,” ABN Amro chief energy economist Hans van Cleef said.

The International Energy Agency said on Wednesday it expected increase in non-OPEC supply to be higher next year than increase in in general world request.

“For total non-OPEC production, we expect production to grow by 700,000 bpd this year, but our initial outlook for 2018 makes sobering reading for those producers looking to restrain supply,” the IEA said in its monthly oil market statement.

“The outlook for oil hinges on the effectiveness of the OPEC cuts relative to the supply increases from US shale,” said William O'Loughlin, analyst at Australia's Rivkin Securities.

Data from the American Petroleum Institute showed on Tuesday that US crude stocks rose by 2.8 million barrels in the week to June 9 to 511.4 million, compared with expectations for a decrease of 2.7 million barrels.

The oil market needs strong request to help offset the rapid increase in supply.

World energy request grew by 1 % in 2016, roughly in line with the previous two years, but well below the 10-year average of 1.8 %, BP said in its benchmark Statistical Review of World Energy on Tuesday.

Related Articles
  • GLOBAL LNG-Prices stay low as oversupply dogs market

    2017/07/19 The Asian market for liquefied natural gas (LNG) remained subdued this week, weighed down by oversupply concerns and as the northern hemisphere exits its high request summer season. Spot prices for Asian LNG LNG-AS were at $5.40 per million British thermal units (mmBtu), down 5 cents from a week ago. That's additional than 70 % below the $20.50 per mmBtu peak from February 2014.
  • President Xi calls on G20 to champion open world economy, foster new growth drivers

    2017/07/10 Chinese President Xi Jinping on Friday called on members of the Group of 20 (G20) major economies to champion an open world economy and a multilateral trade regime as world increase remains unsteady despite signs of recovery. Speaking at the annual G20 summit in Hamburg, a major port city in northern Germany, Xi as well called for concerted efforts in fostering new drivers for increase, promoting a additional inclusive increase and improving world economic governance. "We must remain committed to openness and mutual benefit for all so as to increase the size of the world economic 'pie'," said Xi, who is at the helm of the world's second-major economy.
  • Xi's attendance of G20 summit advances cooperation: Chinese FM

    2017/07/10 Chinese President Xi Jinping's attendance of the Group of 20 (G20) summit in Hamburg on July 7-8 contributed to maintaining and advancing the group's cooperation, Chinese Foreign Minister Wang Yi said here on Saturday. Working together with the other participants, Xi made efforts to promote positive evolution at the Hamburg summit on the basis of the G20's summit held last year in Hangzhou, China, and made new contributions to strengthening cooperation within the G20, promoting world economic increase and improving world economic governance, Wang said.
  • Xi's visit to Russia, Germany enhances ties, attendance of G20 summit strengthens cooperation

    2017/07/10 Chinese President Xi Jinping's new visit to Russia and Germany contributed to promoting China's relations with Russia and Germany, and his attendance of Group of 20 (G20) summit enhanced cooperation, Chinese Foreign Minister Wang Yi said here on Saturday. Xi payed national visits to Russia and Germany on July 3-6, and attended the G20 summit in Hamburg on July 7-8. The visit to Russia promoted bilateral comprehensive strategic partnership of coordination and pragmatic cooperation to a higher level, and the visit to Germany drove further development of China-Germany and China-Europe relations, Wang said.
  • Sub-national diplomacy trumped on climate change

    2017/07/10 In the aftermath of President Donald Trump’s decision to withdraw from the Paris Agreement on climate change, California Governor Jerry Brown chose an unusual form of turmoil — he went to China. He as well made a point of announcing the schedule would include discussions on linking California’s nascent carbon market to China’s emissions trading system, which currently covers several provinces and is due to be expanded country-wide by the end of 2017. For both China and the United States, this type of sub-national diplomacy broke new ground. By proposing to entirely bypass Washington to pursue California’s climate change goals, Governor Brown significantly raised the stakes for sub-national participation in China’s relationship with the outside world. From presently on for China, the United States and other nations, sub-national diplomacy is no substitute for the real thing. In most policy areas, the route to real action still runs through national capitals.