Oil dives 2 percent; consultant sees OPEC crude output rise in July
Oil prices fell more than 2 percent on Friday after a consultant forecast a rise in OPEC production for July despite the group's pledge to curb output, reigniting concerns the global market will stay awash with crude, APA reports quoting Reuters.
Both Brent and U.S. crude tumbled more than a dollar a barrel and were headed toward weekly losses of more than 1.3 percent after Petro-Logistics said OPEC crude production would rise 145,000 barrels per day (bpd) this month. Petro-Logistics, which tracks OPEC supply forecasts, said this would take the group's combined output above 33 million bpd.
Higher supply from Saudi Arabia, the United Arab Emirates (UAE) and Nigeria would drive this month's gains, it said.
Benchmark Brent crude futures LCOc1 were down $1.03 or around 2.1 percent at $48.27 a barrel at 1:17 p.m. (1717 GMT) while U.S. West Texas Intermediate (WTI) crude futures CLc1 traded at $45.89 a barrel, down $1.03 or 2.2 percent.
OPEC and some non-OPEC states, such as Russia, have been trying to cut production 1.8 million bpd through the end of March 2018.
The UAE energy minister, whose country's oil output has been rising, said he was committed to the output cut and he hoped the deal would have a significant impact in the third and fourth quarters.
"We have the OPEC meeting in Russia on Monday and that’s going to be top of mind," said Dan Katzenberg, Senior Exploration and Production analyst at Baird and Co in New York.
The meeting gathers several ministers from OPEC and non-OPEC member countries in St. Petersburg. Kuwaiti Oil Minister Essam al-Marzouq, whose country heads the joint ministerial committee, said attendees would discuss continuing the production cuts.
The committee, known as the JMMC, can make recommendations to adjust the deal if needed, but analysts expressed skepticism that the group will address rising production from Nigeria and Libya, two OPEC members exempted from the cuts.
"There’s no expectation. ..that there’s going to be anything of substance in that meeting," said Katzenberg.
"Libya and Nigeria won't be too enthusiastic to cap their production," said Frank Schallenberger, head of commodity research at LBBW.
The discount of U.S. crude futures front-month versus the second-month CLc1-CLc2 briefly fell to just 12 cents per barrel during the trading session, the lowest since December 2014. This makes it less profitable for speculators to buy oil, sell it forward and store it in the meantime.
U.S. oil drillers cut rigs for a second week since January, with producers cutting one rig in the week to July 21, Baker Hughes said. Analysts said the decline was likely a pause in a drilling recovery expected to continue through at least 2019.
Related news releases
- 20.10.2017EBRD approves loan for TANAP
- 20.10.2017Azerbaijan gets 43% decline in export of oil products
- 20.10.2017Azerbaijan gets rise in revenues from natural gas export
- 20.10.2017Azerbaijan gets 20% decline in revenues from crude oil export
- 20.10.2017Azerbaijan triples energy export
- 20.10.2017Minister: Output cut justifies itself, oil market found balance
- 19.10.2017Extractive Industries Transparency Commission held meeting
- 17.10.2017TAP to invest 800 million euros in Albania
- 17.10.2017Italy’s Edison to purchase Azerbaijani gas
- 16.10.2017TAP pipe deliveries complete
- 16.10.2017Azerbaijan gets 2.5% decline in heating power production
- 16.10.2017SOCAR transfers AZN 1B to state budget
- 14.10.2017Oil rallies nearly 2 percent on China import boost, U.S.-Iran tensions
- 13.10.2017Executive body on ensuring transparency in extractive industry changed in Azerbaijan
- 13.10.2017Azerbaijan increases oil transportation via main pipelines
- 13.10.2017Azerbaijan gets 8% decline in natural gas production
- 13.10.2017Azerbaijan increases gasoline production 5%, reduces diesel production 21%
- 13.10.2017President: Azerbaijani gas will play a major role in solution of issues of Bulgaria's energy security
- 12.10.2017Parviz Shahbazov appointed Azerbaijan’s new energy minister
- 12.10.2017Azerbaijan sees 5% decline in gas production
- 12.10.2017Azerbaijan sees 8% decline in oil output
- 12.10.2017SOCAR to export 1.5 million tonnes of oil via Baku-Novorossiysk pipeline next year
- 12.10.2017Expenditures of STAR Refinery in Turkey increase
- 12.10.2017Azerbaijan may export diesel to Iran
- 12.10.2017Turkmenistan to resume oil transportation via BTC, Kazakhstan holding negotiations
- 12.10.2017BP announces its investments in ACG and Shahdeniz
- 12.10.2017BP Regional President names factors to turn Azerbaijan into a regional energy hub
- 12.10.2017SOCAR Trading to supply liquid gas to Malta
- 12.10.2017SOCAR: ACG currently has more than 550 million tonnes of oil
- 12.10.2017Baku hosting international petroleum summit
- 10.10.2017Board of Directors highly evaluates Nobel Oil Services’ performance
- 09.10.2017Ancient tombs unearthed during TANAP construction
- 06.10.2017Minister: TANAP to be completed earlier than planned
- 06.10.2017Gazprom agrees to open office in Azerbaijan
- 05.10.2017President gives SOCAR instruction to provide gasifying of Lahij settlement
- 05.10.2017Azerbaijan reduces gas production nearly 17%
- 05.10.2017SOCAR reduces gas production nearly 6%
- 05.10.2017Azerbaijan reduces oil production by 9%
- 05.10.2017SOCAR reduces oil production by 1.5%
- 05.10.2017Georgia increases fuel import from Azerbaijan
- 24.07.2017Country manager: TAP construction won’t have negative impact on environment
- 25.07.2017Oil extends gains as Saudi pledges export curbs
- 25.07.2017Anglo Asian Mining earns $19.4M from sale of gold
- 21.07.2017President Ilham Aliyev opens Pirallahi solar power plant
- 20.07.2017Rovnag Abdullayev: 90% works copmleted in STAR refinery
- 20.07.2017SOCAR President: $8.5B invested in TANAP so far