224 Views

Oil prices stable on lower U.S. crude stocks, but rising output weighs

© Reuters. A gas station attendant pumps fuel into a customer's car at a gas station in Shangha© Reuters. A gas station attendant pumps fuel into a customer’s car at a gas station in Shangha

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices were stable on Thursday after posting strong gains late in the previous session on the back of a drop in U.S. crude inventories.

Another rise in U.S. oil production, which is close to breaking through 10 million barrels per day (bpd) is capping crude prices as it undermines efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to tighten the market through withholding output this year and next.

U.S. West Texas Intermediate (WTI) crude futures were at $58.05 a barrel at 0126 GMT, down 3 cents from their last settlement.

Brent crude futures, the international benchmark for oil prices, were at $64.58 a barrel, down 8 cents.

Both crude benchmarks gained around 1 percent during the previous session.

Traders said falling U.S. crude oil inventories were supporting the market.

U.S. crude inventories fell by 6.5 million barrels in the week to Dec. 15, the Energy Information Administration (EIA) said on Wednesday. Overall crude stocks, excluding the U.S. Strategic Petroleum Reserve, fell to 436 million barrels, the lowest since October, 2015.

The rebalancing of supply and demand is a result of OPEC and Russian led voluntary production cuts.

Despite this, the energy minister of Saudi Arabia, the world’s top crude exporter and OPEC’s de-facto leader, said it would take more time to rein in the global supply overhang, which was created by strong global production increases in the years up to 2015.

“We expect the first few months of 2018 to be either flat or a build (in inventories) as it is typically the case with the seasonality with the oil market,” Saudi Arabia’s energy minister Khalid al-Falih told Reuters on Wednesday.

OPEC’s and Russia’s efforts to rebalance markets and prop up prices are being undermined by rising production in the United States, which does not participate in the deal to cut.

U.S. crude production hit 9.79 million bpd last week, its highest since the early 1970s, the only time American production breached 10 million bpd.

This brings U.S. output close to that of top producers Saudi Arabia and Russia, which pump around 10 and 11 million bpd.

Oil traders this week eyed with interest the passing of a U.S. tax bill, which is seen to weigh on crude prices in the longer term.

“The passage of the U.S. tax bill is … a bearish long-term development for oil and gas markets. The policies … are likely to reduce demand for gas and oil and raise supplies … (as) the tax bill preserves renewable energy tax credits, a tax credit for EVs (electric vehicles), and opens up drilling in the Arctic National Wildlife Refuge,” Barclays (LON:BARC) bank said.

sponsoredArticle = ‘div-gpt-ad-1466339494851-0’;

Get the best viral stories straight into your inbox!

Don't worry, we don't spam

Leave a Comment

Your email address will not be published.

Latest Posts

Four dead in ambush of World Food Programme convoy in Nigeria
News
278 views
News
278 views

Four dead in ambush of World Food Programme convoy in Nigeria

SPFadmin - December 21, 2017

Four dead in ambush of World Food Programme convoy in Nigeria BAUCHI, Nigeria (Reuters) - Four people were killed when a United Nations World Food Programme (WFP)…

Trump says not considering firing U.S. special counsel Mueller
News
230 views
News
230 views

Trump says not considering firing U.S. special counsel Mueller

SPFadmin - December 21, 2017

© Reuters. FILE PHOTO: FBI Director Mueller testifies at a security threat hearing on Capitol Hill in Washington WASHINGTON (Reuters) - President Donald Trump, when asked on…

Diminished winds help California battle historic wildfire
News
219 views
News
219 views

Diminished winds help California battle historic wildfire

SPFadmin - December 21, 2017

© Reuters. Firefighters keep a close watch on the Thomas wildfire in the hills outside Montecito, California By Phoenix Tso VENTURA, Calif. (Reuters) - Calming winds on…

Chilean conservative Pinera seen winning presidency: media forecast
News
221 views
News
221 views

Chilean conservative Pinera seen winning presidency: media forecast

SPFadmin - December 21, 2017

© Reuters. Chilean presidential candidate Pinera with his grandchildren and his wife Morel speaks to the media after voting in a public school during the presidential election,…

Nuclear, renewables to help French CO2 reduction goals, Macron says
News
222 views
News
222 views

Nuclear, renewables to help French CO2 reduction goals, Macron says

SPFadmin - December 21, 2017

© Reuters. French President Macron and German Chancellor Merkel give a joint news conference in Brussels PARIS (Reuters) - French President Emmanuel Macron said on Sunday he…

U.S. Inflation Rebound Hasn’t Been the Right Kind for This Fed
Economy
266 views
Economy
266 views

U.S. Inflation Rebound Hasn’t Been the Right Kind for This Fed

SPFadmin - December 21, 2017

© Bloomberg. The Marriner S. Eccles Federal Reserve building stands in Washington, D.C., U.S., on Friday, Nov. 18, 2016. Federal Reserve Chair Janet Yellen told lawmakers on…

‘Ronaldo of finance ministers’ becomes new Eurogroup chairman
Economy
254 views
Economy
254 views

‘Ronaldo of finance ministers’ becomes new Eurogroup chairman

SPFadmin - December 21, 2017

© Reuters. Centeno, Portugal's Finance Minister and newly elected President of the Eurogroup, holds a news conference at the European Council in Brussels By Jan Strupczewski and…

Macron sees February end to fight against Islamic State in Syria
News
261 views
News
261 views

Macron sees February end to fight against Islamic State in Syria

SPFadmin - December 21, 2017

Macron sees February end to fight against Islamic State in Syria PARIS (Reuters) - The military campaign against Islamic State in Syria should be completed in February…

Iran airs ‘confessions’ of researcher facing death for spying
News
112 views
News
112 views

Iran airs ‘confessions’ of researcher facing death for spying

SPFadmin - December 21, 2017

Iran airs 'confessions' of researcher facing death for spying By Bozorgmehr Sharafedin LONDON (Reuters) - Iranian state television broadcast on Sunday what it described as the confessions…

Colombia’s ELN rebels willing to extend ceasefire if talks progress
News
85 views
News
85 views

Colombia’s ELN rebels willing to extend ceasefire if talks progress

SPFadmin - December 21, 2017

© Reuters. A rebel of Colombia's Marxist National Liberation Army shows his armband while posing for a photograph, in the northwestern jungles BOGOTA (Reuters) - Colombia's leftist…