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What’s next? – OIL 24.01.18

Jan 24 2018, 01:41 PM (+06) | Fortfs.com

Oil futures traded mixed in Asian hours on Wednesday, with market players awaiting official US inventory data later in the day, while keeping an eye on OPEC’s rhetoric over cuts.

 

The US West Texas Intermediate crude contracts were up 0.06 percent to $64.51 per barrel as of 07:25 GMT. Meanwhile, Brent futures declined 0.14 percent to $69.86 a barrel.

 

Crude benchmarks settled in green territory on Tuesday as market participants were optimistic that OPEC and Russia will extend output cuts beyond the new deadline to counteract increasing oil production levels in the United States.

 

Russian and Saudi energy ministers reassured on Monday its commitment to support the 1.8 million barrels per day production-cut deal through 2018.

 

The agreement has been very beneficial for oil prices in the last few months. However, fears about rising US output continued to weigh on sentiment, especially after the International Energy Agency warned that it could soon break above 10 million barrels per day.

 

Crude production in the US was up by 258,000 barrels per day (bpd) to 9.75 million barrels per day last week, according to the Energy Information Agency.

 

Also supporting crude prices was a report by the International Monetary Fund, in which the global economic growth forecast was revised upwards, adding speculation about higher consumption in the next few months.

 

The American Petroleum Institute (API) said crude inventories for the week ending January 17 rose by 4.755 million barrels, putting an end to a seven-week reduction streak.

 

Analysts had forecasted a 1.3 million barrels reduction in weekly crude supplies; a 2.440 million barrels increase in gasoline stocks; and a 1.580 million barrels draw in distillate inventories.

 

The Energy Information Administration will present its official crude and refined products inventories as usual at 15:30 GMT on Wednesday.

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