Oil prices fell slightly as US pumps more

Apr 19, 2017, 01:42
Oil prices fell slightly as US pumps more

United States shale production in May was likely to post the biggest monthly gain in more than two years, government data showed on Monday, as producers stepped up the pace of drilling, with oil prices holding above $50 a barrel. A day earlier, before the break wrapped up most key markets, it ended up 3 cents at $55.89 per barrel. If they do, prices will likely continue their climb-giving the USA, which isn't part of the pact, more incentive to boost its crude output, contributing to a global glut.

"The soft U.S. CPI (consumer price index) on Friday will ease yields further, also undermining the reflationist markets such as oil and precious metals", he said. The 13-member cartel, in its latest monthly oil market report for April, said Nigeria recorded the biggest decline of about 157,000bpd in the period under review.

There's a long lag time between when rig counts would translate to actual production, though USA output is already above 9 million barrels per day.

As it stands, the USA has been quick to fill the gap left by the OPEC cuts, which has capped any substantial price growth that the oil conglomerate would have liked to see.

"So that gives the market pause at how effective they're going to be at taking oil out of the market".

US drillers last week added rigs for a 13th straight week, bringing it to its highest in roughly two years.

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Global trade has fostered "economic miracles" around the world, driving growth and lifting millions out of poverty, he stressed. Its UK growth forecast was significantly boosted from 1.5 percent to 2.0 percent this year, slowing to 1.5 percent in 2018.

In November last year, OPEC and other producers, including Russian Federation, agreed to cut output by about 1.8 million barrels per day (bpd) during the first half of this year.

"We should have a month of headline-driven trading in the run-up to the May 25 meeting", Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut, said in a phone interview.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $53.16 a barrel, down $0.44, or 0.8%, in the Globex electronic session. With European growth still "anemic", she said the USA market is one of the main contributing factors to the price of oil. Crude fell even as Saudi Arabia's Energy Minister Khalid Al-Falih said Monday that the oil market is on the road to re-balancing. OECD stocks, particularly products, drew by 0.8 million b/d in 4Q16, but we estimate that in 1Q17 they increased by 0.4 million b/d, mainly for crude oil and, in turn mainly in Europe and the US.

Oil declined below $53 a barrel as the US continued to ramp up drilling, stoking concern that the nation's surge in output this year will offset OPEC-led efforts to cut a global supply surplus.

The line, operated by Aiteo, is one of two along with the Trans Niger Pipeline that carries Bonny Light crude oil to the export terminal.SPDC has, however, completed the fix work and production is expected to peak in the next monthly report, while exports of roughly 232,000 bpd had been planned for this month.