Oil prices slide almost 1 pct on persistent glut concerns

Andrew Cummings
June 12, 2017

The bad news is US crude production rose to 9.34 million bpd last week, up almost 500,000 bpd from a year ago. The two contracts hit session highs of $51.44 and $49.07 respectively.

Growing worry over crude oversupply after Libya increased output has sent Global oil prices lower, which is likely to result in a price cut of NT$0.5 (US$0.017) per liter for gasoline and diesel at CPC Corp.

Increased U.S. drilling would put a strain on OPEC and other major producers' efforts to curb production in an effort to trim the global supply glut and stabilize prices.

Futures are down some 9 percent since OPEC's May 25 decision to extend the cuts.

NEW YORK, June 2 (Reuters) - Crude fell more than 1 percent on Friday, heading for a second straight week of losses, on worries that U.S. President Donald Trump's decision to withdraw from an worldwide climate accord will spur further domestic production and contribute to a persistent global oversupply. U.S. West Texas Intermediate crude futures fell 84 cents to $47.54 per barrel.

The March production figure is about 0.5 percent lower than the department's earlier estimate of 9.15 million barrels a day for the same month, a sign that US output could come in lower than the agency has forecast this year.

But oil markets were offered some support by official data that showed crude inventories in the United States, the world's top oil consumer, fell sharply last week as refining and exports surged to record highs. "A scenario that would not be favourable to oil prices".

Investors have returned their focus to rising production, with USA average daily output last week hitting its highest level since August 2015.

Tankers loaded 122 million barrels of Iraqi crude at ports in the Persian Gulf and Mediterranean Sea last month, according to vessel-tracking and shipping agent data gathered by Bloomberg. The number of rigs operating in USA fields has jumped by 11 to a total 733 last week, compared with 325 at this time past year. It may also possibly bring about increased output from the United States and tip the Organization of Petroleum Exporting Countries' (OPEC) price securities. "But crude production is slowly but surely going to neutralise the (Opec-led) production cut", said Sukrit Vijayakar, director of energy consultancy Trifecta.

Rising output from OPEC members Nigeria and Libya, which are exempt from the deal, is also undercutting the attempt to limit production.

"Trump seems to be removing any barriers he can find that would obstruct growth of crude oil or natural gas", said Stewart Glickman, energy equity analyst at CFRA in NY.

Download the Nigeria Today app from Play store.

Other reports by iNewsToday