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Saudi Arabia and Russian Federation signal oil cuts extension into 2018

12 May, 2017, 02:44 | Author: Paula Vaughn

The price of Brent crude fell 10% to as low as $46.64 a barrel last week, its lowest level since November as traders became impatient with OPEC's attempts to force a return to higher oil prices.

Still, the notification of cuts in June allocations signals added urgency among Opec members as evidence mounts that the output reduction has so far failed to rein in a global crude glut in crude.

Crude prices surged back above $47 to settle higher, as investors' jitters concerning rising levels of USA oil output eased, after the EIA revealed a bullish inventories report.

Shipments data has shown signs of drawdown, with shipments from OPEC countries expected to fall about 50 million barrels in April, according to Thomson Reuters.

Oil was steady before government data forecast to show us crude stockpiles fell for a fifth week, further reducing an inventory surplus.

World stocks held near all-time highs on Thursday, helped by a rebound in energy shares as oil prices rose after us fuel inventories declined and Saudi Arabia cut supplies of crude to Asia more than expected.

Last week saw supermarkets cut petrol prices twice reflecting the recent pressure on Brent crude.

On the physical markets, barrels of North Sea crude changed hands at their lowest levels since late 2015 on May 8.

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Crude oil prices could get some support later in the month as OPEC members and other participating producers meet to consider the terms of the production arrangement.

TOKYO: Oil futures rose in Asian trading on Wednesday after Reuters reported Saudi Arabia would cut supplies to the region as OPEC battles against rising USA output that is threatening to derail its attempts to end a sustained global glut in crude.

A source also told Reuters that seven million barrels is roughly two days' worth of oil imports into Japan, the world's fourth biggest importer.

Brent for July settlement was 20 cents higher at $48.93 a barrel on the London-based ICE Futures Europe exchange.

Crude oil prices drifted lower on Tuesday as investors continued to express concerns over slowing demand and the rise in USA crude output.

Nigeria, which along with Libya is exempt from OPEC cuts, is also expected to see a jump in output soon.

Since a low point in May 2016, U.S. producers have added 387 oil rigs, or about 123%, Goldman Sachs said.

While US output fell past year, OPEC sees it recovering and expanding further in 2017.

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