Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

UPDATE 3-Oil prices bounce but stuck near 2017 lows on supply overhang

Published 2017-06-16, 04:24 a/m
© Reuters.  UPDATE 3-Oil prices bounce but stuck near 2017 lows on supply overhang
LCO
-
CL
-

* Despite pledge, OPEC and Russian oil supplies remain high

* Soaring U.S. output also weighs on market

* Global oil supply & demand balance: http://tmsnrt.rs/2s2OtVQ (Updates throughout, changes dateline previous SINGAPORE)

By Libby George

LONDON, June 16 (Reuters) - Oil prices edged up from 2017 lows on Friday but an ongoing supply excess put them on track for their fourth consecutive week of losses despite OPEC-led production cuts to support the crude market.

Brent crude futures LCOc1 were up 42 cents at $47.34 per barrel by 0755 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $44.74 per barrel, up 28 cents.

"The market took a breather yesterday and is trying to recover somewhat this morning. It is by no means bullish," said Tamas Varga, analyst at brokerage PVM Oil Associates.

Both benchmarks remained roughly 13 percent below where they stood in late May, when producers led by the Organization of the Petroleum Exporting Countries (OPEC) extended a pledge to cut production by 1.8 million barrels per day (bpd) by an extra nine months until the end of the first quarter of 2018.

Rising U.S. oil output has undermined the impact of OPEC-led cuts. Data from the U.S. Energy Information Administration (EIA) this week showing growing gasoline stocks and shaky demand, despite the peak summer driving season, sent prices tumbling. EIA/S

"It's going to be difficult to have a rally unless there's a disruption or some news from OPEC," said Olivier Jakob, managing director with PetroMatrix.

Recovering production from Libya and Nigeria, both of which were exempt from OPEC cuts, and high exports and production from Russia were also contributing to the ongoing glut.

Top producer Russia, not an OPEC member but which signed up to the deal to cut output, is expected to export 61.2 million tonnes of oil via pipelines in the third quarter, equivalent to about 5 million bpd, against 60.5 million tonnes in the second quarter, according to industry sources and Reuters calculations. in Russia's tanker shipments and its total exports are likely to be more than 9 million bpd.

In the United States, which is not participating in any deal to reduce production, oil output C-OUT-T-EIA has risen more than 10 percent in the past year to 9.3 million bpd. The EIA expects that to rise above 10 million bpd in 2018. rig counts due later in the day on Friday could add further downward pressure.

"Oil is unlikely to find solace into the weekend either, with tonight's Baker Hughes Rig Count expected to deliver its now weekly increase of operational rigs," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC - Brent crude oil price curve

http://reut.rs/2syJWft

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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.