Oil prices ease on signs of steady output from some producers
Oil prices were about 1 percent lower on Monday as investors continued to await strong indications that an OPEC-led effort to drain a glut was proving effective but output increases in some top producers eased, keeping losses in check, APA reports quoting Reuters.
Libya's national oil production stood at 1.03 million barrels per day (bpd), little changed from its level since the end of last month, an oil industry official said.
U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes (BHGE.N) said on Friday. RIG-OL-USA-BHI Rig additions over the past four weeks averaged five, the slowest pace of growth since November.
Still, U.S. shale oil production was forecast to rise for the eighth consecutive month, climbing 112,000 barrels per day (bpd) to 5.585 million bpd in August.
Key technical indicators are bullish, however, with prices rising above the short-term 50-day moving averages, traders said.
Brent crude LCOc1 fell 49 cents, or 1 percent, to settle at $48.42 a barrel. U.S. crude CLc1 ended the session 52 cents, or 1.1 percent lower at $46.02. Prices had earlier touched their highest since July 5.
"The idea of higher production levels, particularly in the U.S., Libya and Nigeria ... I think that seems to have been priced in for the moment," said Gene McGillian, manager of market research at Tradition Energy.
"I am skeptical. I think the market has bounced but it's having trouble finding traction to move higher probably because some the drop off in inventories are likely due to gasoline demand picking up."
A sharp drop in U.S. crude inventories in the week to July 7 supported prices last week. [EIA/S] But crude stocks in industrialized nations remained high, putting a brake on the oil price rally. [IEA/M]
"The market is not doing too much today - it feels like wait and see," said Olivier Jakob of oil analyst Petromatrix. "There is some rebalancing in products, but overall the layers of stocks are still very large."
U.S. gasoline margins RBc1-CLc1 rose to the highest since April 24 amid signs of improved demand and inventory declines, traders said.
Oil prices are less than half their mid-2014 level because of a persistent glut, even after the Organization of the Petroleum Exporting Countries with Russia and other non-OPEC producers cut supplies since January.
While OPEC-led cuts have offered prices some support, rising supplies from Nigeria along with Libya, two OPEC states exempt from the pact, and increasing U.S. production have weighed on the market.
Kuwait said on Friday the market was on a recovery track due to rising demand and said it was premature to cap Nigerian and Libyan output. An OPEC and non-OPEC committee meets in Russia on July 24 to discuss the impact of the deal.
In a sign of strong demand, data on Monday showed refineries in China increased crude throughput in June to the second highest on record. OPEC is hoping higher demand in the second half will drain excess inventories.
Related news releases
- 23.06.2018Operation desert storm memorial to be built in Washington, DC
- 23.06.2018Trump urges Republican lawmakers to drop immigration bill until election
- 22.06.2018Trump prolongs sanctions against North Korea for another year
- 22.06.2018Venezuela to back OPEC + decisions aimed at stabilization of oil price
- 22.06.2018Pentagon asked to house up to 20,000 migrant children
- 22.06.2018US House rejects conservative immigration bill
- 21.06.2018Trump signs order halting separation of families
- 20.06.2018House to vote on Thursday on immigration bills
- 20.06.2018US withdraws from UN Human Rights Council
- 19.06.2018US, Russian top diplomats discuss Syria over phone
- 19.06.2018Trump orders creation of US 'Space Force'
- 17.06.2018Argentina to replace energy and production ministers
- 16.06.2018At least 17 dead in Venezuelan nightclub after tear gas blast
- 16.06.2018Kushner, Haley hold talks with UN chief on humanitarian needs in Gaza
- 16.06.2018U.S. warns Americans of terrorism threat at World Cup in Russia
- 16.06.2018Trump supports Republican immigration bills in U.S. House: White House
- 16.06.2018U.S. judge sends ex-Trump campaign head Manafort to jail pre-trial
- 16.06.2018Trump sets tariffs on $50 billion in Chinese goods; Beijing strikes back
- 15.06.2018Trump tells G7 leaders that Crimea is Russian
- 15.06.2018Pompeo says North Korea sanctions to remain until complete denuclearisation
- 15.06.2018UN calls for vital port of Hudaydah to stay open
- 15.06.2018Nicaragua president's foes stage nationwide strike
- 15.06.2018DoD Chief Mattis Discusses With S Korean Counterpart Results of Singapore Summit
- 15.06.2018US forces conduct airstrike in Libya, manage to kill one terrorist
- 14.06.2018Facebook's chief of communications, policy to step down
- 14.06.2018Norwegian politicians nominate Donald Trump for Nobel Peace Prize
- 14.06.2018UN votes to condemn Israel's 'excessive force' against Gaza Protests
- 14.06.2018Top White House officials planning to quit
- 14.06.2018Volcanic ash forces Guatemala airport to suspend operations
- 14.06.2018Trump says summit removed North Korean nuclear threat
- 14.06.2018Antarctic thaw quickens, trillions of tonnes of ice raise sea levels
- 13.06.2018Trump, Iran spar over oil prices ahead of OPEC meeting
- 13.06.2018Trump says no war games while North Korea negotiates in good faith
- 13.06.2018New US sanctions will have no effect - Russia’s Foreign Ministry
- 13.06.2018Kim Jong-un, Donald Trump accept each other's visit invitations
- 12.06.2018UN Sec Gen: implementing agreements by US, North Korean leaders requires patience
- 12.06.2018US must sustain maximum economic pressure on Pyongyang - House Speaker
- 12.06.2018Trump top economic adviser suffers heart attack moments before Trump-Kim Summit
- 12.06.2018US sanctions new Russian entities over cyberattacks
- 12.06.2018US extradites former Panamanian president
- 18.07.2017US to maintain dialogue with Israel on halting Iranian ambitions in Syria
- 18.07.2017US Navy tests laser weapons system in Persian Gulf
- 18.07.2017Tillerson Recertifies Iran's compliance to nuclear agreement
- 16.07.2017US Navy commissions new Arleigh Burke-class destroyer at Pearl Harbor base
- 16.07.2017Turks in Germany mark anniversary of defeated coup
- 16.07.2017Cat killer jailed for 16 years in San Jose, California