Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Crude Oil Prices Waver as Investors Weigh OPEC Curb Against. U.S. Shale Output

Published 2017-12-14, 05:38 a/m
Updated 2017-12-14, 05:54 a/m
© Reuters. Investors remain concerned over increased U.S. shale production

© Reuters. Investors remain concerned over increased U.S. shale production

Investing.com – Oil prices showed mixed trade on Thursday after two-straight sessions of declines as market participants continued to weigh the battle between the Organization of the Petroleum Exporting Countries’ (OPEC) attempts to curb global supply while U.S. shale producers continued to ramp up output.

The U.S. West Texas Intermediate crude January contract fell 5 cents, or 0.09%, to $56.55 a barrel by 5:37AM ET (10:37GMT) Friday.

Elsewhere, Brent oil for February delivery on the ICE Futures Exchange in London gained 11 cents, or 0.18%, to $62.55 a barrel.

Crude oil prices settled lower on Wednesday after a larger-than-expected surge in U.S. gasoline stockpiles outweighed a larger-than-expected decline in U.S. crude inventories.

Also weighing on crude prices was a rise in production to record highs as data showed weekly U.S. crude production jumped by 73,000 barrels a day to 9.78 million barrels per day (bpd), bringing output close to levels of top producers Russia and Saudi Arabia.

The U.S. report came after OPEC revealed in its monthly report that production in November, fell by 133,000 bpd to 32.5 million bpd but revised upward its 2018 forecast for non-OPEC output.

Supporting bulls, reports out on Thursday pointed to the rumors that OPEC along with other non-OPEC producers led by Russia may be considering output cuts beyond the current timeframe which sees curbs until the end of 2018. The group agreed on the nine-month extension to the end of next year in a decision only just made in a gathering at the end of November.

However, concern remains that current prices will give U.S. shale companies sufficient reason to ramp up production to fill in the gaps, offsetting attempts to rebalance markets. OPEC’s monthly report highlighted that production outside the cartel is “associated with considerable uncertainties”. U.S. oil supply is now expected to grow by 1.1 million bpd in 2018, an upward revision of 180,000 barrels, according to the report.

In the same line of thinking the International Energy Agency warned Thursday that there were signs that the ongoing rise in U.S. crude oil production was likely to continue into 2018 and upset rivals who are cutting back.

"We see that 2018 might not be quite so happy for OPEC producers," the Paris-based organization said in its latest monthly report released on Thursday.

The IEA forecast that non-OPEC supply, which includes the U.S., was set to rise by 600,000 barrels per day (bpd) in 2017, and 1.6 million bpd in 2018. It also noted that global oil supply rose 200,000 bpd in November to 97.8 million bpd, adding that this was "the highest in a year, on the back of rising U.S. production."

To also take into consideration for Thursday’s session, a weaker-than-expected reading on Chinese industrial production dampened sentiment overnight, although a strong refinery throughput helped keep hopes on the rise.

China's November crude runs reach 49.4 million metric tons, up 8.1% on year with January to November crude runs up 5.2% to 518.66 million metric tons even as domestic crude oil production fell 2.5% on year to 15.7 million metric tons with year-to-date output at 175.64 million metric tons, down 4.1%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.