Is the Oil Rally on the Rise?

Ivan Schwartz
March 14, 2018

Between November 2017 and February 2018, Indian crude oil imports from Venezuela averaged some 300,000 bpd, down by around 20 percent compared to the same period a year earlier, industry and shipping sources told Reuters on the condition of anonymity.

The U.S. report of larger than expected supply reports from last week is looking to extend this week according to most market speculations.

The price for May futures of the North Sea Brent oil mix increased by 0.12 percent -to $65.03 per barrel, and the price for April futures of West Texas Intermediate (WTI) oil increased by 0.05 percent -to $62.39 per barrel on March 13.

The U.S. government expects major shale regions to boost output by 131,000 bopd in April, spurring fears that surging supplies will undermine OPEC's efforts to clear a glut.

That has undercut some of the enthusiasm for oil, as investors weigh increased U.S. supply against the likelihood that the Organization of the Petroleum Exporting Countries and non-Opec producers will maintain supply cuts that have been in effect for more than a year. Prices could trade sideways if the dollar strengthens along with stocks. West Texas Intermediate, the USA marker, is now near US$62 a barrel.

As American output continues to expand, more exports will sail to Asia, the traditional bastion of Middle East producers.

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According to multiple sources, the USA crude may fall back to its December oil production which reached whopping 10 million barrels per day.

SINGAPORE, March 13 (Reuters) - Oil prices dipped on Tuesday, extending losses from the previous session, as the inexorable rise in USA crude output weighed on markets.

Latest US oil production data will be released on Wednesday.

Showing the lowest level since 2015, United States crude inventories dropped 1.1 million barrels in the week of January 19, according to the Energy Information Administration (EIA).

OPEC should beware as USA shale producers are set to steal a bigger slice of the market in Asia, which consumes more oil than any other region, according to industry consultant Wood Mackenzie Ltd.

He concluded, "We think compliance is likely to slip; the deal will still officially be in place, but once we get into 2019 there's no chance that we will see some sort of deal".

Other reports by GizPress

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