🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Oil stable on falling Libyan output, but bloated US market still weighs

Published 30/03/2017, 11:50 am
© Reuters.  Oil stable on falling Libyan output, but bloated US market still weighs
LCO
-
CL
-

* Libyan oil production reportedly down to 500,000 bpd

* U.S. crude stocks at new record, but gasoline inventories fall

* OPEC compliance with announced production cut increases

* But doubts remain over Russian compliance

By Henning Gloystein

SINGAPORE, March 30 (Reuters) - Oil prices were steady on Thursday, supported by falling crude output in Libya and declining gasoline stocks in the United States, although bloated U.S. crude inventories are still weighing on markets.

Prices for front-month Brent crude futures LCOc1 , the international benchmark for oil, were at $52.42 per barrel at 0040 GMT, unchanged from their last close.

In the United States, West Texas Intermediate (WTI) crude futures CLc1 were up 5 cents at $49.57 a barrel.

ANZ said on Thursday that prices were supported by Libyan oil output falling to about 500,000 barrels per day (bpd) due to the shutdown of pipelines from its biggest field.

And while a rise in U.S. crude inventories weighed on markets, ANZ said that "the market got excited" about a drawdown in gasoline stockpiles.

"The big falls in gasoline inventories, coming near the end of the refinery maintenance season, suggest crude oil inventories are on the cusp of declining," it said.

U.S. crude inventories USOILC=ECI rose 867,000 barrels in the week ending March 24, compared with analyst expectations for an increase of 1.4 million barrels. Total inventories were at a record of nearly 534 million barrels, the Energy Information Administration (EIA) said on Wednesday. stocks USOILG=ECI fell 3.7 million barrels, compared with expectations for a 1.9-million barrel drop.

Key for the direction of oil prices will be whether an initiative led by the Organization of the Petroleum Exporting Countries (OPEC) to cut oil production during the first half of the year will be extended, and how high compliance with the reduction targets will be.

OPEC, along with other producers including Russia, aims to cut output by almost 1.8 million bpd during the first half of the year.

OPEC compliance with its targets is expected to be 95 percent this month, up from 94 percent in February, according to Reuters surveys. compliance is lower by non-OPEC members like Russia, who have officially agreed to participate in the cuts.

"Russia's 300,000 bpd cut commitment particularly has been called into question," Eurasia Group said this week in a research report.

"While it remains possible Russia can scrape together a combination of outages and natural decline at some west Siberian brownfields and spin this as a 300,000-bpd output cut, it is highly unlikely Russia will achieve an absolute 300,000 bpd reduction during the tenure of the current agreement," it added.

As markets remain bloated halfway into the cuts, there is a broad expectation that the supply cuts will be extended into the second half of the year.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.