March 24, 2017

OPEC achieves 91% compliance with targeted cuts

08 February 2017, 12:40 | Felicia Christensen

Venezuela Minister Discusses Oil in Tehran

OPEC should cut crude production “a bit more” in the second half of 2017

In the short term, traders and analysts are eyeing the uptrend in USA oil drilling and stockpiling of crude and petroleum products.

"Gasoline is just getting slaughtered today, and it's dragging crude with it", Bob Yawger, director of the futures division at Mizuho Securities USA in NY, said by telephone.

A survey by S&P Global Platts estimates US crude inventories rose by 2.5 million barrels in the most recent week, while gasoline stocks also rose by 1.2 million barrels. The latest United States production data will also have an important impact given concerns over rising United States output and a sharp increase in Baker Hughes rig count over the past 3 weeks. First indications of compliance to that deal showed members cut production by 900,000 barrels a day (bpd) in January, according to Petro-Logistics, which tracks Opec supply.

West Texas Intermediate for March delivery fell 84 cents to $US52.17 a barrel on the New York Mercantile Exchange.

Concurrently, Comex silver was up 0.27% or 5 cents at $17.74 an ounce, while spot platinum was 0.73% or $1.75 lower at $1,007.40 an ounce, still clear of the psychological $1,000-level it last breached in January. Diesel futures fell 1.92 cents, or 1.17%, to $1.616 a gallon. Total volume traded was about 27 per cent below the 100-day average.

The price for Brent crude oil was 0.52 percent below the previous close about an hour before the start of trading in NY to $55.43 per barrel. Nationwide stockpiles are at 494.8 million barrels, the highest seasonal level in more than three decades, according to weekly data compiled by the EIA since 1982. BP said on Tuesday it made a "small" loss trading oil in the fourth quarter, while Shell last week said profits "flattened" in late 2016.

A stronger dollar makes greenback-dominated commodities like crude oil more expensive to holders of other currencies.

The past fortnight saw oil prices consolidate again in a very tight range as traders' dilemma with regard to actual oil output cut and its impact on prices remained uncertain.

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