Oil prices settle above $50 a barrel

Azerbaijan Interested in Extension of Oil Output Cut Deal - Energy Ministry

Azerbaijan Interested in Extension of Oil Output Cut Deal - Energy Ministry

The rally started earlier in the week, as USA supply data from the Energy Information Administration and disruption in Libyan oil supplies heartened traders.

Growing U.S. supply is expected to partly offset cuts by the Organization of the Petroleum Exporting Countries and their partners, said Rahul Prithiani, director at CRISIL Research.

The risk of an even faster sell-off will be seen as a major risk by most oil-producing countries, providing further motivation for the OPEC deal to be extended, Birch added.

This significant reduction in Libyan oil output along with the ongoing output-cut by OPEC countries tightened global oil supply and improved its prices.

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

"I see no sign from OPEC and Saudi Arabia that they will not roll over the cut into the second half of the year. the market is about to go from supply surplus to deficit on crude " said Scott Shelton, energy futures broker with ICAP in Durham, North Carolina.

US oil stockpiles rose by 867,000 barrels last week, and supplies of refined products dropped, according to data from the Energy Department, adding momentum to oil prices after supply disruptions from Libya helped boost futures earlier.

USA crude futures were down 19 cents at $50.16 a barrel after slipping back below $50.

Factory output shrinks 1.2% in February amidst falling economic activity
The annual increase strengthened to 1.2% from 0.2% previously, although this was notably lower than the expected figure of 2.0%. This was along a 1.1% fall in output of non-durable consumer goods, a wide category including fresh vegetables and clothing.

Recent disclosures reveal that producers rushed to lock in oil prices above US$50 a barrel after OPEC's November announcement about production cuts.

Michael Wittner, the global head of oil research at Societe Generale, said USA data on inventories for crude oil were concerning because of the steady build, but bullish for products like gasoline and diesel.

The United States Oil Fund (USO) jumped 2.2% Wednesday in regular trading. It is also the third time this year that US exports exceeded a million barrels a day, an industry record.

Brent for May settlement, which expired yesterday, slipped 13 cents to US$52.83 a barrel on the London-based ICE Futures Europe exchange.

- Concern that OPEC output cuts have driven a surge in production from rival US drillers may prevent an extension of the caps - yet prices won't suffer much, according to the chief economist at Russia's state-owned Vnesheconombank. The global benchmark crude traded at a $2.52 premium to WTI. But increasingly supportive rhetoric from OPEC nations to extend the cuts into latter part of 2017 has helped brighten market sentiment.

Meanwhile, investors anxious that the faster pace of output from US shale and crude producers could dampened OPEC's efforts to reduce the supply and demand imbalance in the industry.

An armed group in Libya shut pipelines Monday because of a dispute over wage issues, disrupting production of 250,000 barrels a day.

Recommended News

  • Hinchcliffe takes win at Long Beach

    Hinchcliffe takes win at Long Beach

    It was also Hinchliffe's first victory since he survived a near fatal crash during a practice run at the Indianapolis 500 in 2015. Then came contender Alexander Rossi, who suffered an obvious engine failure on his No. 98 on lap 62 from inside the top 5.
    Wells Fargo & Co (WFC) Receives

    Wells Fargo & Co (WFC) Receives "Hold" Rating from Sandler O'Neill

    WARNING: This piece of content was originally published by Markets Daily and is the sole property of of Markets Daily. Cardinal Capital Management increased its position in shares of Wells Fargo & Co by 2.5% in the third quarter.

    Video of passenger getting dragged off flight sparks uproar

    Bridges said the passengers were told to go back to the gate so that officials could "tidy up" the plane before taking off. Oscar Munoz, the chief executive of United Airlines, called the episode "an upsetting event to all of us here at United".
  • Every Europa League game a 'final' for Man United - Shaw

    Every Europa League game a 'final' for Man United - Shaw

    Jose insists that United are still fighting on two fronts for Champions League qualification but feels his side can go all the way in Europe.
    Stars align for Garcia Masters win

    Stars align for Garcia Masters win

    Open will be played in June at Erin Hills in Wisconsin, a new venue that Rory McIlroy labeled "a bit of an unknown to everyone". It was a wonderful battle and if there is anyone you want to lose to it's Sergio. "He's had his share of heartbreak".

    North Korea blasts U.S. strikes on Syria, says justify nukes: state media

    South Korean and US forces are also involved in annual joint military drills that run until the end of April. Japanese Prime Minister Shinzo Abe has appreciated the strong United States commitment to global security.
  • One For Arthur wins Grand National at 14-1

    One For Arthur wins Grand National at 14-1

    Jumping in the north is regularly - and correctly - portrayed as the poor relation to its cousins in the south. None of those victories compare to the $1.25 million Grand National.

    Egypt on edge as Christians bury dead from church attacks

    Sunday's attacks have sparked renewed public anger at President Abdel Fattah al-Sisi, who has promised to crack down on extremism. Francis will then meet with state authorities and with the head of the Coptic Orthodox Church of Alexandria, Pope Tawadros II.

    Manchester United to welcome back Valencia against Anderlecht

    United will lock horns with Anderlecht in the first leg of the Europa quarter-finals while they will take on Chelsea in their next Premier League clash.
  • Thousands protest law that could oust university from Hungary

    Thousands protest law that could oust university from Hungary

    Thousands marched in Hungary at the weekend in support of a George Soros-backed university that faces a government crackdown. It now has approximately 1,400 students and 370 faculty members from more than 130 countries and regions.

    Trump explained US position on THAAD to Xi: South Korea

    But it has been reluctant to put too much pressure on the North Korean regime. At the meeting, Xi also invited Trump to visit to China this year.
    Chicago judge shot, killed outside his home

    Chicago judge shot, killed outside his home

    While the incident possibly started as an attempted robbery, police said nothing was taken from the judge or the woman. The other driver punched him in the face, causing serious injuries, according to court records cited in the newspaper.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.