Crude Oil Firms Above $50

Marcus Newton
September 21, 2017

U.S. crude oil stockpiles jumped last week as imports and production increased, the U.S. Energy Information Administration said, as operations resumed from the impact of Hurricane Harvey which hit the Gulf Coast on August 25.

OPEC and 10 producers outside the cartel, including Russian Federation, agreed late previous year to cap production at around 1.8 million barrels a day lower than peak October 2016 levels; part of an effort to alleviate the global oil glut and boost prices. "The big thing about this week is that the inventory reports are going to be bearish for crude."Even as oil refineries restart, imports at reopened ports are likely to drive up stockpiles, he said.Oil refineries across the Gulf of Mexico and the Caribbean were restarting after being shut as hurricanes Harvey and Irma battered the region over the past three weeks.Royal Dutch Shell Plc's Deer Park refinery in Texas was among the latest, beginning its restart on Sunday". The data suggesting refiners will need to step up crude processing followed robust demand growth forecasts last week from the International Energy Agency and OPEC. "Any increase in the production from the spring of 2018 would...generate renewed oversupply in the oil market and put prices under pressure", the analysts wrote in a note Wednesday.

"OPEC and other participating countries in the deal are planning to extend the oil curb beyond March next year, when the agreement is scheduled to end". Earlier this week, Iraqi Oil Minister Jabbar al-Luaibi said he and ministers from other oil-producing nations think production should be reduced by an additional one per cent.

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U.S. West Texas Intermediate (WTI) crude futures were at $50.01 per barrel, up 10 cents, or 0.2 percent, from their last settlement. Total volume traded was about 2% below the 100-day average. The global benchmark crude traded at a premium of $US5.60 to November WTI.

"We have more work to do to get supplies back up to normal so that should be very bullish for crude oil", Phil Flynn, senior market analyst at Price Futures Group in Chicago, said by telephone. Inventories expanded by 1.44 million barrels last week, the American Petroleum Institute was said to report. The October contract expires at the end of Wednesday's session.

Other reports by MaliBehiribAe

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