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Oil prices face second weekly loss as oversupply lingers

Published 28/04/2017, 10:50 am
© Reuters.  Oil prices face second weekly loss as oversupply lingers
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* OPEC lobbies for extension to cut output beyond H1 2017

* Relentless rise in U.S. output undermines OPEC efforts

By Henning Gloystein

SINGAPORE, April 28 (Reuters) - Oil prices stabilised on Friday but were on track for a second straight weekly loss on concerns that an OPEC-led production cut has failed to significantly tighten an oversupplied market.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $49.21 per barrel at 0036 GMT, up 24 cents, or 0.5 percent, from their last close. However, WTI is still set for a small weekly loss and is down more than 8 percent from its April peak.

Brent crude futures LCOc1 , the international benchmark for oil prices, were at $51.59 per barrel, up 15 cents, or 0.3 percent. Brent is almost 9 percent below its April peak and is also on track for a second week of declines.

Traders said that Friday's slight rises came on the back of statements by OPEC that it was keen to find a deal that would ensure a drawdown of excess global fuel supplies, which have weighed on markets for over two years. a deal would likely mean an extension of a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia to cut output by almost 1.8 million barrels per day (bpd) during the first half of the year.

Despite this, ANZ bank said on Friday that "traders remained worried about increasing supply."

This is largely due to a persistent rise in U.S. crude oil production C-OUT-T-EIA , which has risen by 10 percent since mid-2016 to 9.27 million bpd, to levels last seen during the height of the oil glut between late 2014 and early 2016.

And analysts expect U.S. production to keep rising this year.

Consultancy Rystad Energy expects U.S. shale oil output to grow by 100,000 bpd each month for the rest of this year and into 2018, well above estimates by the U.S. Energy Information Administration for monthly gains of about 29,000 bpd in 2017 and 57,000 bpd in 2018.

"We see a risk for a weaker oil price towards the end of the year... because shale is delivering so much oil and OPEC might fight back," Jarand Rystad told Reuters earlier this week. the United States, rising output in Libya, an OPEC-member exempt from the cuts, was adding to plentiful supplies. Murky oil inventory picture leaves market grappling for clarity

COLUMN: OPEC heads for failure as crude shipments overwhelm cut rhetoric

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