Oil Prices Remain High On China Demand

Brent Crude

The culprit has been a combination of weaker demand growth and higher production from USA shale producers as well as Libya and Nigeria, which are exempt from OPEC's output reduction efforts. Iraq's crude exports rose 1.7 percent to 3.818 million barrels a day, the data showed.

Russian refining and fuel consumption have been recovering following a strengthening of the economy, which means less of the country's crude will be available this year for export, the consultancy said.

Despite such a complicated environmental situation, global crude prices started increasing in the second half of July this year.

Outside the USA, supplies from the Organization of the Petroleum Exporting Countries (OPEC) remained high, largely because of rising output from member-states Nigeria and Libya, despite the club's pledge to cut production. The deal expires after March 31, 2018. Iran, Algeria and Iraq also gamed the Opec deal by ramping up production during the two months between the negotiation of the Saudi-brokered pact and the year-end deadline for output cuts. The agency said that demand would expand by 1.4 million barrels per day (mb/d) this year, or about 0.1 mb/d faster than it previously thought. "Otherwise, the rebalancing of the oil market will remain painfully slow", said Carsten Fritsch, oil analyst at Commerzbank AG in Frankfurt, Germany.

Gold picked itself up off the floor Friday, propelled by weaker U.S. CPI and Retail Sales numbers, to rise a stunning 18 dollars to trade as high as 1233.00 before closing at 1228.00.

Oil prices edged up today as traders recovered from anxiety about a surprise rise in United States crude stockpiles. The global benchmark traded at a premium of US$2.16 to September WTI. OPEC is hoping higher demand in the second half will drain excess inventories.

The decline in imports lead to a drop-in crude oil stocks, as demand for total products increased.

Throughput last month hit 46.08 million tonnes, or 11.21 million barrels per day (bpd), a 2.3-percent rise from a year ago and up from May's 10.98 million bpd, data from the National Bureau of Statistics (NBS) showed on Monday.

EIA releases weekly data Wednesday.

"Saudi Arabia showed a reduction of output so there's a little bit of strength from the data there", said Tony Headrick, energy market analyst at CHS Hedging. The company wants to expand refining capacity to 1.3 million barrels a day beyond 2030, and Kuwaiti crude will supply at least 65 percent of all of KPI's new refineries outside Kuwait, he said. Saudi Arabia, the largest OPEC producer, yielded 9.9 million barrels per day last month.

Oil prices gained last week as the dollar weakened and global demand forecasts were revised higher by the IEA.

"Saudi Arabia reiterates its commitment to market stability and wants to make sure the oil market is well balanced", the Saudi source said.

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