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Oil dips on rising U.S. crude inventories, high OPEC supplies

Published 19/07/2017, 11:31 am
© Reuters.  Oil dips on rising U.S. crude inventories, high OPEC supplies
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By Henning Gloystein

SINGAPORE, July 19 (Reuters) - Oil prices fell on Wednesday after a rise in U.S. crude inventories and ongoing high supplies from producer club OPEC revived concerns of a fuel supply overhang.

Brent crude futures LCOc1 , the international benchmark for oil prices, were at $48.73 per barrel at 0128 GMT, down 11 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $46.28 per barrel, down 12 cents, or 0.3 percent.

U.S. crude stocks rose last week, adding 1.6 million barrels in the week to July 14 to 497.2 million barrels, industry group the American Petroleum Institute said late on Tuesday. the United States, supplies from within 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.

"Nigeria and Libya have made significant progress in reinstating their oil supply. Production in Libya is currently reported at or above 1 million barrels per day while August loading schedules for Nigeria have risen to just over 2 million barrels per day," French bank BNP Paribas (PA:BNPP) said.

"The increment of crude oil supply from Nigeria and Libya in June vs. October 2016 reference production levels comes to 450,000 barrels per day on average. This is almost 40 percent of the 1.25 million barrels per day cut by the OPEC 10 members engaged in supply restraint," it added.

Nigeria and Libya are exempt from the deal between OPEC and other producers, including Russia, to cut production by around 1.8 million barrels per day between January this year and March 2018 in order to tighten the market and prop up prices.

"Talk of capping Nigerian and Libyan output has been growing fast (within OPEC). But it is very unlikely that both countries will acquiesce to a cap so soon after restoring production," BNP said.

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