Oil prices drop as OPEC crude production increases

Oil market remains volatile

Oil prices rose to a two-week high yesterday, extending a rally into a sixth straight session after a decline in weekly United States production eased concerns about deepening oversupply.

Brent crude, the global oil benchmark, rose over 7% last week while West Texas Intermediate, the US gauge, gained 6.5%, with both benchmarks pushed higher by data showing the first decline in USA oil-drilling activity since January.

West Texas Intermediate crude futures for August delivery were marked 0.3% higher at $46.17 by mid-day in London after hitting an intraday price of $46.43, the highest since June 14.

Omran al-Zwai, a spokesman for Arabian Gulf Oil Company (AGOCO), an NOC subsidiary, said output had been as high as 950,000 bpd in recent days, rising from about 885,000 bpd at the start of last week.

Oil prices may comfortably remain in the $40 to $60 range for the year, with some potential upside to that range in 2018 as the global expansion causes a steady increase in demand.

The negative sentiment in the oil market lingers with USA stocks increasing and with good news and bad news trading headline places daily.

They cut their forecast for average 2017 Brent crude prices to $50 a barrel from $54 and WTI to $47 from $52.

Lingering worries about oversupply have knocked 16 percent off Brent crude so far this year, despite a deal involving OPEC members and some other major producers to curb production by about 1.8 million barrels per day (bpd).

Furthermore, in a trading statement released last week, Tullow raised its profit guidance for the first six months of the year - which is a positive development. The shale boom and domestic unrest quickly forced Nigeria out of the USA oil trade. Gartman said US technology will expand to Russia, Mexico, China the Middle East and Africa. American production is now at 9.3 million barrels a day. Iraq is a member of the OPEC-led effort to balance the market, thought it raised questions about the agreement previous year.

OPEC and non-OPEC technical committee on production enforcement was said to have examined the scenario including Nigeria and Libya's exempt in the production cuts. Production this year could reach 30,000 barrels of oil per day.

"That arithmetic ought to persuade OPEC and Russian Federation of the value of sticking with it, maybe cutting sufficient extra barrels to offset Libya and Nigeria increases and reaping the reward of higher overall 2017 revenues", said Fyfe.



Latest news

Pennsylvania man arrested in road rage killing of recent high school graduate
The recent high school graduate, who had planned to attend Jacksonville University in the fall, was pronounced dead at the scene. He is set for a preliminary hearing July 13. "She had a good heart", said her father, Rodney Roberson, according to ABC News .

Kanye West leaves Jay-Zs Tidal over money dispute
Kim and Kayne attended Blue Ivy's birthday this year, and they sent their congratulations when Beyonce gave birth to the twins. Fans have gotten pretty used to great things coming from this duo; their co-produced album Watch The Throne was a hit in 2011.

Feds Arrest Suspect In U Of I Kidnapping; Victim Likely Dead
A prayer vigil planned for Saturday was canceled in the wake of the alleged kidnapper's arrest and news of Zhang's possible death. Zhang , a 26-year-old visiting scholar from China, was reported missing from the University of IL at Urbana-Champaign on June 9.

Gordon Hayward is set to meet with three teams
It didn't take long for Stevens to gain respect in the National Basketball Association after leaving Butler for Boston in 2013. Hell, people raised money to put up massive billboards with his image and the hashtag #Stayward , all over the Wasatch Front.

Other news