U.S. crude inventory rises further

Mar 25, 2017, 00:59
U.S. crude inventory rises further

According to the U.S. Energy Information Administration's data, the United States alone imported as much as 1.3 million barrels per day from some of the OPEC's top exporter last February.

U.S. West Texas Intermediate (WTI) crude futures were up 18 cents, or 0.4 per cent, at $47.88 a barrel.

Brent crude ended up 24 cents to $50.80, and ended down 1.8 percent this week.

"The flat price is starting to bottom".

The official said the expected drop, in line with OPEC's agreement, could help draw down USA inventories that stood at a record 533 million barrels last week - stocks that have in part remained buoyant because of reduced seasonal refining runs. "A lot of the negativity has been priced in", said Olivier Jakob, managing director of PetroMatrix.

Overseas oil suppliers like Saudi Arabia are now competing against a major effort by US producers to increase shale drilling that has driven up USA oil production by more than 8 percent since mid-2016 to just above 9.1 million bpd.

Still, Saudi exports to other regions remain high despite an effort led by the Organization of the Petroleum Exporting Countries, and supported by other producers including Russian Federation, to cut output by 1.8 million bpd during the first half of the year. "This is mainly because there is a refinery maintenance in the U.S. The cuts in exports will help the crude stockpiling in the U.S.to go down", the official said.

"Opec has done their part, but USA inventory data is still rising, keeping the lid on the oil price", said Aslam, commenting there were no signs of a demand shock for crude and for the price to rise further and start a new journey.

A cut would likely affect China most, as the world's second-largest oil consumer buys close to 90 percent of Oman's exports.

With this trend, the OPEC members would face difficulty in achieving their target to raise the oil prices by cutting the oil supply. If there is going to be turnaround in the market it is going to have to come from an effort by OPEC.

"This slump is very real". For the week, however, prices still lost roughly 1.7% as growing USA production threatened to offset the impact of the global output cuts.

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