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US oil prices open above $50 for first time since May, but headwinds persist

Published 01/08/2017, 11:40 am
Updated 01/08/2017, 12:20 pm
© Reuters.  US oil prices open above $50 for first time since May, but headwinds persist

By Henning Gloystein

SINGAPORE, Aug 1 (Reuters) - U.S. oil opened above $50 per barrel for the first time since late May on Monday, supported by strong fuel demand, but ongoing high supplies from producer club OPEC kept prices from rising further.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $50.25 per barrel at 0127 GMT, up 8 cents, or 0.2 percent, from their last close. That marked the first time U.S. crude had opened above $50 per barrel since May 25.

Brent crude futures LCOc1 , the international benchmark for oil prices, were trading up 6 cents, or 0.1 percent, at $52.78 per barrel.

"U.S. gasoline demand climbed to last year's highs and U.S. inventories, notably on the East Coast, declined," said French bank BNP Paribas (PA:BNPP).

Overall U.S. commercial crude oil stocks have fallen by 10 percent from their late-March peaks to 483.4 million barrels, and seasonally adjusted they are now, for the first time this year, below 2016 levels. C-STK-T-EIA

Despite this, there were also signs that global oil markets remained amply supplied, capping further price rises.

"Crude oil prices face multiple headwinds as OPEC struggles (to cut excess supply)," BNP said.

Oil output by the Organization of the Petroleum Exporting Countries (OPEC) has risen this month by 90,000 barrels per day (bpd) to a 2017-high of 33 million bpd, a Reuters survey found, led by a further recovery in supply from Libya, one of the countries exempt from a production-cutting deal. comes despite a pledge by OPEC and other producers, including Russia, to cut output by 1.8 million bpd between January this year and March 2018.

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