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Oil Prices Fall to Three-Month Low as US Rig Count Climbs

17 March, 2017, 01:05 | Author: Paula Vaughn
  • World to face oil shortages already in 2020

Still, the rise combined with OPEC disclosing that oil held in storage in the Organization for Economic Co-operation and Development rose in January to more than 3 billion barrels, above the five-year average, was followed by more market losses on Tuesday.

Even after the increase, Saudi Arabia's data shows it's cutting output more than required under the terms of OPEC's November 30 agreement. Opec producers have implemented almost 98 per cent of the agreed cuts as per latest data.

The outlook for a continuing oil oversupply comes despite Saudi Arabia's deal with competitors to make a larger-than-required production cut in January.

USA inventories have climbed more than expected, causing prices to decline even as global producers cut their output, Kuwait's Oil Minister Issam Almarzooq said, according to official news agency Kuna.

However, crude oil (XLE) (IXC) (IEZ) futures are trading near a three-month low due to the rise in Saudi Arabia's crude oil production.

Secondary sources had said Saudi output fell in February to 9.797-million barrels a day, but Riyadh told Opec it rose to 10.011-million barrels a day.

Families plead for Somali pirates to release ship's crew
The ship had been carrying fuel from Djibouti to Somalia's capital, Mogadishu , when it was approached by men in two skiffs. The gunmen have told a local official that they are fishermen whose equipment was destroyed by illegal fishing vessels.

Saudi Arabia "is committed and determined to stabilise the global oil market by working closely with all other participating Opec and non-Opec producers", its energy ministry said.

The oil market has seen an avalanche of bad news weigh on prices over the past several days, pushing prices down to their lowest level since November 30.

Despite dipping below $US50 a barrel last week, crude oil is still well above a 12-year low reached in January 2016 of around $US27 a barrel.

U.S. West Texas Intermediate and global Brent crude oil futures are trading higher in Asia, extending their gains from the firm closes in Wednesday's session. OPEC's second-biggest producer pumped 4.414 million bpd last month. As such, Russian Federation has delivered only 40 percent of the promised cut of 300,000 bpd, although it was never said that Russian Federation will reduce its production volume at once. The uS price later recovered the $US48 a barrel level in after hours trading. May Brent crude shed 7 cents, or 0.1%, to $51.74 a barrel on the ICE Futures exchange in London. The Kingdom clarified in its statement that its supply to the market stood at 9.9 million barrels per day in February, well below the 10.1 million barrel a day quota it agreed with other producers.

Moreover, US oil supply growth for 2017 was revised up by 0.10 million barrels per day to 0.34 million barrels per day, following higher rig counts and stronger cash flows.

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