Oil Little Changed As Growing US Supply Offsets Bullish Saudi Comments
NEW YORK, March 7 (Reuters) - Oil prices ended little changed on Tuesday, as growing U.S. production expectations offset earlier gains after Saudi Arabia's oil minister said market fundamentals were improving.
The market, however, fell in post-settlement trade after data from industry group the American Petroleum Institute showed U.S. crude stocks last week rose 11.6 million barrels, or more than five times analysts' forecast.
If the build is confirmed by the U.S. Energy Information Administration (EIA) at 10:30 a.m. EST (1530 GMT) on Wednesday, it would be the ninth straight weekly rise in inventories that are already at record highs.
At the CERAWeek energy conference in Houston, Saudi Oil Minister Khalid Al-Falih said last year's agreement by OPEC and non-OPEC countries to curb supplies and boost prices has improved oil market supply and demand fundamentals.
But Falih said that happened only because Saudi Arabia cut beyond what it pledged, bringing the kingdom's output below 10 million barrels per day (bpd). He also said the Organization for the Petroleum Exporting Countries (OPEC) would not let rival producers take advantage of the cuts to underwrite their own production investments.
The group is expected to meet again in May, when it could consider extending the production cuts.
Brent futures slipped nine cents, or 0.2 percent, to settle at $55.92 a barrel, while U.S. West Texas Intermediate (WTI) crude lost six cents, or 0.1 percent, to settle at $53.14.
Both benchmarks were about 0.7 percent lower after the API data.
Oil prices have been stuck in a $3 band since February, failing to take off after OPEC implemented, to a surprisingly high degree, the first production cut in eight years.
Prices came under pressure as U.S. shale oil drilling increased after WTI rose firmly above $50 a barrel in December after OPEC sealed the deal with Russia and other non-OPEC producers.
"OPEC has unrealistic expectation as to what their production cuts can achieve," said Phil Davis, managing partner at PSW Investments in Woodland Park, New Jersey, noting U.S. production over the next two years is expected to wipe out much of the OPEC cuts.
The EIA projected U.S. oil production would rise to an average of 9.2 million bpd in 2017 and 9.7 million bpd in 2018, which, if correct, would top the current record high of 9.6 million bpd set in 1970.
Fund managers have doubled their net long positions in Brent, WTI and options to 951 million barrels between the start of November and Feb. 21, betting OPEC's output cuts would lift prices.
But that bullish sentiment has wavered with Russia's lackluster participation in the cuts, rising U.S. shale output and signs OPEC countries began increasing crude exports in February.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- USA Driving Activity to Increase to All-Time Highs
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension