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Oil prices dip on record US crude exports, but OPEC-led supply cuts support

Published 05/10/2017, 11:32 am
Updated 05/10/2017, 11:40 am
© Reuters.  Oil prices dip on record US crude exports, but OPEC-led supply cuts support
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By Henning Gloystein

SINGAPORE, Oct 5 (Reuters) - Oil prices dipped on Thursday after the United States reported record crude exports, although traders said that efforts led by OPEC and Russia to cut production meant markets remained well supported overall.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $49.90 per barrel at 0015 GMT, down 8 cents, or 0.16 percent, from their last close.

Brent crude futures LCOc1 , the international benchmark for oil prices, were down 5 cents, or 0.1 percent, at $55.75 a barrel.

The declines came after the Energy Information Administration (EIA) said late on Wednesday that U.S. crude oil exports jumped to 1.98 million barrels per day (bpd) last week, surpassing the 1.5 million bpd record set the previous week. increase has been triggered by the wide spread between U.S. WTI and international Brent crude prices, which makes U.S. oil exports attractive.

Some traders said this was also an indicator that markets remained amply supplied despite efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to cut output to tighten the market and prop up prices. Hansen, head of commodity strategy at Denmark's Saxo Bank said it was "still too early" for oil markets to expect crude prices to see a sustained period above $60 per barrel.

But analysts said that oil prices were unlikely to fall much further.

"Oil prices remain supported by ongoing supply restrictions from the OPEC and Russia, with the agreement likely to be extended ... Any weakness in oil prices are thus likely to be short-lived," said Fawad Razaqzada, market analyst at futures brokerage Forex.com.

Russian President Vladimir Putin said on Wednesday during an industry event in Moscow that the pledge between OPEC and other producers including Russia to cut oil output could be extended to the end of 2018, instead of expiring in March 2018. pact between OPEC and other producers, which excludes the United States, on cutting output by about 1.8 million bpd took effect in January this year.

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