API Reports Seventh Large Crude Draw In Seven Weeks

Chelsea West
January 18, 2018

While enjoying the extra revenues, the Organization of the Petroleum Exporting Countries, Russia and their allies remain wary of sending prices so high that U.S. shale production climbs even faster and the market becomes oversupplied again.

Kuwait's oil minister Bakhit al-Rashidi said on Wednesday there is no plan or intention so far to exit from a production-cutting agreement among OPEC and non-OPEC oil producers.

US West Texas Intermediate (WTI) crude futures were at $64.03 a barrel, up 6 cents from their last settlement. WTI marked a December 2014 peak of $64.89 a barrel on Tuesday.

US crude inventories were estimated to have fallen 3.5 million barrels in the week ended January 12, according to a Reuters poll.

The tighter supplies come on the back of supply cuts by the Organisation of the Petroleum Exporting Countries (Opec) and Russian Federation, who started to withhold production in January previous year.

Traders said prices had been pushed up after reports that Nigerian militants Niger Delta Avengers threatened to launch attacks on the country's oil sector in the next few days.

The continued drop in U.S. crude oil inventories corresponded to a decline in USA production for the week ending January 5, coming in at 9.492 million bpd compared to the week prior of 9.782 million bpd.

Oil slips towards $69 ahead of US supply report
API Reports Seventh Large Crude Draw In Seven Weeks

Rashidi explained that the market is now stable enough to accommodate any issues that do not have a major impact on supply and demand, adding: "control of production will insure stability of the market more than any factor such as relations between countries". "This would put the USA on par with Saudi Arabia and Russia's output", said Fawad Razaqzada, market analyst at future brokerage Forex.com.

Investigations also showed that USA crude stocks fell by 11.2 million barrels in the week to January 5 to 416.6 million barrels, industry group, the American Petroleum Institute, said on Tuesday.

The cuts are set to last through 2018.

Data from the American Petroleum Institute (API) on Wednesday showed a well supplied fuel product market, which could mean lower crude demand going forward.

Reuters cited Russian Energy Minister Mr Alexander Novak as saying that a global deal to cut oil output led by OPEC and Russia should continue because the market is still not balanced.

The firm said the reasons for this expected slowdown were an expected rise in USA oil output as well as a slowdown in demand growth.

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