March 24, 2017

Oil Futures Continue Losses as US Production Climbs

11 January 2017, 12:37 | Felicia Christensen

Limited downside risks for oil & gas stocks: Analysts

Six factors that may put a brake on oil rally

US crude futures were trading at $52.66 barrel, down $1.33 at 10:51 a.m. ET (1551 GMT).

Light, sweet crude for February delivery recently dropped 45 cents, or 0.9% to $51.50 a barrel on the NYME.

Crude oil prices were lower Tuesday, continuing their losses from the prior session on concerns that higher U.S. oil production will negate the OPEC/non-OPEC oil producer's output cut. Oil output, according to EIA weekly surveys, is up roughly 300,000 bpd from summer lows, with more supply expected to come online in the months ahead as drilling picks up pace.

Libya, which was exempted from Opec's agreement to cut its members' production inked on 30 November 2016, has seen its production jump to 708,000 barrels per day (bpd); the highest on official records since 2014, the country's National Oil Company said.

Oil fell for the first time in four days as rising USA drilling activity fanned speculation that OPEC production cuts could boost North American output. The morning movement for crude oil prices may be subdued as investors await the next short-term market report from the U.S. Energy Information Administration, which comes out later Tuesday. Chinese firms are expected to lift between 3 million to 4 million barrels more Iranian oil each quarter in 2017 than previous year, trading sources say.

Another area of concern is increasing number of oil rigs in the U.S for a tenth week in a row, the number jumped up to 529, the highest figure since December 2015, according to Baker Hughes.

Russian Federation agreed to cut 300,000 barrels a day as part of the November 30 deal reached in Vienna setting the global oil production ceiling at 32.5 million barrels per day.

In 2012, Iran's energy sector was hit by the US-led sanctions, reducing the country's crude exports from 2.5 million bpd to almost 1 million barrels per day.

"There will be some countries that will cheat, Iraq being the most likely culprit", said Amrita Sen, the chief oil market analyst at Energy Aspects.

Iraq opposed cutting its own production during initial negotiations among OPEC members, arguing that it needed the funds from oil in order to pay for its war against the Islamic State.

There are signs Iranians are taking advantage of higher prices to sell more. With the dollar strong and US stock markets trading near all-time highs, traders are anticipating a break of the support levels to take markets higher or a reversal which could send markets broadly lower. And any failure for the entirety of promised cuts to stick, or rising production elsewhere, will mean oil prices lower than those at present for the foreseeable future.

Other News

Trending Now

SeaWorld's Tilikum whale has died
The "Blackfish" documentary argued that killer whales, when in captivity, become more aggressive toward humans and each other. This story has been corrected to show the year of the trainer's death at Sealand was 1991, instead of 1992.

Donald Trump says he has information on Russian Federation hacking scandal
Republican John McCain has scheduled a Senate hearing on Russian hacking for this Thursday. One of the unnamed officials even reportedly called Trump's rant " adversarial ".

Dana White Says Conor McGregor vs. Floyd Mayweather Will Never Happen
Having recently scooped the RTÉ Sports Person of the Year award, McGregor is clearly the most famous athlete in the country. McGregor said: 'As far as a break I don't know, I know Dana (White ) has gone on record and said '10 months'.

Vikings' Adrian Peterson ruled out vs. Packers
Meanwhile, the Packers (9-6) are assured of playing at Detroit (9-5) on January 1 in a game that will decide the NFC North. Minnesota (7-8) will play out the string with a meaningless regular-season finale January 1 against Chicago at U.S.

Vehicle bomb kills at least 19 in Syria's Azaz: monitor
According to media activist Baha al-Halabi, witnesses say many bodies were unidentified due to the strength of the explosion. More than 310,000 people have been killed in Syria since the conflict began with anti-government protests in March 2011.

From celebrations to resolutions: New Year's Eve by the numbers
Gomez said there would be almost 7,000 officers in the Times Square area leading up to the Waterford crystal ball drop. The bulletin goes on to state there are no specific or credible threats to the annual Times Square celebration.

Trump Calls Schumer 'Head Clown' Over Obamacare Stance
The latest Trump broadside on one of his foes came via the same platform many others have: Twitter. "We'll have benchmarks. Schumer said at a September conference it was his "No. 1 goal" to get a progressive Supreme Court, according to Malcolm.

Manchester United thump Reading, Wayne Rooney ties record as club's top scorer
Rooney was denied from an acute angle and Fellaini was thwarted from the follow-up as United ended the game as they started it.

Swansea appoints Paul Clement as new manager
Clement would be the south Wales team's third manager this season, with Francesco Guidolin and then Bob Bradley fired. The Welsh side now sit rock bottom of the Premier League table.

Regulators Chip Away at Qualcomm
USA chipmaker Qualcomm has been fined a record 1.03trn won ($854m, £698m) for allegedly breaching competition law in South Korea. Regulators in other jurisdictions, including the United States and Taiwan, are also investigating the chipmaker.