Ian Taylor, the chief executive of trading company Vitol, told the Reuters annual Commodities Summit that slowing oil demand growth and an increase in the volume of Iranian crude supply would help keep a lid on fuel prices.
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As crude oil trades at its lowest levels since the beginning of the month, we expect this [supply] build to put further pressure on prices, with more builds looming during refinery maintenance season, said John Macaluso, an analyst at Tyche Capital Advisors.
“With weak Chinese industrial production, we may see Chinese manufacturing PMI worsen, thus, leading to weaker oil prices”, he said, referring to the forward- looking Purchasing Managers’ Index to be released later this week.
The market posted sharp losses of about two percent Wednesday as official data showed USA crude stockpiles increased much more than expected last week, adding to worries about a global glut that has depressed prices for more than a year.
The WTI-Brent spread was near $6.80 per barrel in early September 2013 and near $1.30 per barrel in mid-September 2015.
“We don’t need permission from anyone to export our oil, and our production will enter the market”, he said.
“The reason the market pretty much shrugged the news off was because the idea was spearheaded by Venezuela, who has very little influence in OPEC”, Richey said.
Moody’s said that USA oil production only recently began to wane following months of declining oil rig counts.
Investors are also eyeing the outcome of an oil experts meeting later on Wednesday involving members of the Organisation of the Petroleum Exporting Countries and non-OPEC oil producers.
USA benchmark West Texas Intermediate for delivery in December rose 19 cents to $45.39 and Brent crude for December climbed 27 cents to $48.12 a barrel at around 0630 GMT.
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On top of this, Iran is expected to boost oil production when global sanctions are lifted after it implements the conditions of a nuclear deal agreed with major world powers. Iran has the world’s fourth-largest reserves of oil and second-largest deposits of gas, according to the U.S. Energy Information Administration. That would be the longest run of gains since April and keep supplies more than 100 million barrels above the five-year seasonal average, according to EIA data.
