Oil prices fall on surprise rise in U.S. inventories, high OPEC output
Reuters
Published Aug 01, 2017 21:00
Updated Aug 01, 2017 21:10
Oil prices fall on surprise rise in U.S. inventories, high OPEC output
* U.S. crude inventories up 1.8 mln barrels to 488.8 mln -API
* OPEC output at 2017-high of 33 mln bpd
* Oversupply to return, to last for years -Douglas Westwood
By Henning Gloystein
SINGAPORE, Aug 2 (Reuters) - Oil fell on Wednesday, with rising U.S. fuel inventories pulling U.S. crude back below $50 per barrel, while ongoing high supplies from producer club OPEC weighed on international prices.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $48.85 per barrel at 0046 GMT, down 31 cents, or 0.6 percent, from their last settlement. That came after the contract opened above $50 for the first time since May 25 on Tuesday. crude futures LCOc1 , the international benchmark for oil prices, were trading down 30 cents, or 0.6 percent, at $51.48 per barrel.
The American Petroleum Institute (API) said late on Tuesday that U.S. crude stocks rose by 1.8 million barrels in the week ending July 28 to 488.8 million, hitting hopes that recent inventory draws were a sign of a tightening U.S. market. global markets, prices were weighed down by a survey this week that showed production by the the Organization of the Petroleum Exporting Countries (OPEC) hit a 2017-high of 33 million barrels per day (bpd), despite the club's pledge to restrict output together with some non-OPEC producers including Russia by 1.8 million bpd between January this year and March 2018. of rising global output, energy consultancy Douglas Westwood said oversupply would likely return soon, and last for years.
"Oversupply will actually return in 2018. This is due to the start-up of fields sanctioned prior to the downturn. This is in addition to the production gains through increased investment and activity in the U.S. unconventional space," said Steve Robertson, head of research for the firm's Global Oilfield Services.
Douglas Westwood said it expected oversupply to last until at least 2021.
Robertson said that "external factors such as major interruptions to supply from political or weather-related events can shift the balance quickly". But he warned that "any expectations of recovery based upon optimism or wishful thinking along 'it always bounces back' should be tempered by a reality check, and the very real possibility that the current recovery could take much longer to materialise".
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.