Oil prices rise on falling U.S. fuel inventories, lower production outlook

Nigeria to put off deciding whether to join OPEC cuts
by Reuters 3 hours ago 15 views0

USA crude gained 63 cents, or 1.4% to $45.67 U.S.

Barclays said recent weakness for crude oil prices reflects the need to price in a shale industry that's competitive at lower prices and the return of at least 300,000 barrels per day in combined output from Libya and Nigeria.

Data from the Energy Information Adminstration (EIA) says crude inventories dropped off by 7.6 million barrels last week, compared with analysts' expectations for an decrease of 2.9 million barrels. WTI settled at $45.04 on Tuesday and opened at $45.74 Wednesday morning. Brent crude, the global benchmark, was up 86 cents, at $48.38 a barrel by 0824 GMT.

In China, though refined oil demand is expanding, it is still unable to outpace supply, said Li. Led by Libya and Nigeria, which are not in the list of oil output cut deal. EIA in its report said it expected WTI to average $49 per barrel this year, $2 per barrel less than its previous estimate. It is the 11th decline in the last 13 weeks.

US heating oil futures were also up nearly 2 percent at midday. That is down 1.2% from a year ago. Recommend selling around $46 per barrel and at rallies.

US crude imports fell last week by 282,000 bbl/d, while exports rose to 918,000 bbl/d from 768,000 bbl/d.

All this is setting the stage for on-highway diesel projected to average $2.59 per gallon for this year, down 2.5% from last month's forecast, but 12.1% higher when compared to 2016's average. It was at just 8.6 million a year ago.

Coal: "Higher coal-fired generation and more exports are expected to be major contributors to an increase in USA coal production this year, with coal output in western states rising the most".

OPEC, along with Russian Federation and some other major exporters, has agreed to hold production at about 1.8 million barrels per day (bpd) below levels pumped at the end of a year ago.

Output by all 13 OPEC members in June rose to about 32.47 million barrels per day, according to the average assessments of secondary sources OPEC uses to monitor its output. But Angola and Saudi Arabia production was notably higher, as was production in Iraq and Iran. But production elsewhere has risen as OPEC has held back. "That was the first official sign that there could be some downgrades coming", said Ole Hansen, head of commodity strategy at Saxo Bank, on the new report. S&P has already downgraded Exxon Mobil, Royal Dutch Shell, Total, BP.

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