Oil falls after failed North Korean missile test, USA rig count gains
- Author: Wendy Palmer Apr 19, 2017,
Apr 19, 2017, 1:47
They settled 53c lower at $52,65 a barrel.
Oil prices may rise by 20 percent this year as energy producers outside the USA keep a lid on how much crude they pump, said analysts at Citigroup.
In London, however, June Brent crude LCOM7, -1.07% on the ICE exchange fell by 11 cents, or 0.2%, to $55.25 a barrel.
More barrels could be on their way to market from U.S. shale fields as financial companies were investing billions in production, a Reuters analysis showed.
"The market has also reacted in a way that the OPEC-non-OPEC decision has been earnest and practically successful because the prices, after a 20-day slump, returned to the $55 domain indicating that the OPEC has lived up to its output cut plan", he added.
The U.S. Energy Information Administration "estimates for a combined 124,000 barrels-per-day growth in U.S. shale production over May have added another bearish element to the market", wrote analysts at JBC Energy, based in Vienna. It was up 7 cents to $53.18 on Wednesday. "China believes that escalating geopolitical tensions and extended OPEC cuts will ultimately drive up crude prices in H2".
US West Texas Intermediate (WTI) crude futures were also down 4c at $52,61 a barrel.
Saudi Arabia is bearing the brunt of the output cuts that members of the Organization of Petroleum Exporting Countries pledged to make in the first six months of this year.
"With eight additional rigs this week in the Permian...and three additional rigs in the Eagleford, U.S. producers continue to increase production back up to production levels reached before the [price] crash", said Curt Taylor, president of Opportune LLP's Ralph E. Davis Associates, referring to the Baker Hughes BHI, -1.46% rig-count data for the week ended April 13.
As actual, physical oil reserves are drawn down throughout the remainder of the year, the evidence of rebalancing will become more apparent, says the agency.
Thus, Saudi Arabia plans to develop 30 projects in the field of solar and wind energy to increase electricity production and reduce oil consumption, according to the Minister of Energy, Industry and Mineral Resources of Khalid al-Falih.
"So that gives the market pause at how effective they're going to be at taking oil out of the market". For the past four weeks, according to preliminary EIA data, the USA has taken in about 12 percent less Saudi crude than the same time a year ago.
China's oil demand has risen quite a bit over the past few years, and has recently been hastened as a result of crude price collapse.
The line, operated by Aiteo, is one of two along with the Trans Niger Pipeline that carries Bonny Light crude oil to the export terminal.SPDC has, however, completed the fix work and production is expected to peak in the next monthly report, while exports of roughly 232,000 bpd had been planned for this month.
In November 2016, OPEC made a decision to cut its output by 1.8 million barrels for the first six months of this year to end the rising global oversupply.
Angola, which has been working hard to remain Africa's top producer, climbed to the top again for being able to maintain a daily production of 1.652 million barrels since January, even though it is a drop from last quarter of 2016 levels of 1.736mbpd.