Oil prices steadied Thursday after falling most of the week, as markets reacted to the International Energy Agency’s mixed outlook for crude. That would be a slowdown from this year’s growth of 1.4 million barrels a day. “From a technical standpoint WTI Crude is bearish, a breakdown below $41 could encourage a further decline towards $40”.
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North Sea Brent crude dropped by 50 cents to $43.55, while U.S. light crude traded at around $41.15 a barrel, down 56 cents, Reuters reported.
Brent for October settlement rose 9 cents, or 0.2 percent, to $44.14 a barrel on the London-based ICE Futures Europe exchange.
In this report, the agency says, “We expect more subdued growth in refining activity, with runs lagging total oil demand growth for all but the first quarter this year-hardly good news for the crude oil market in the short term”.
Oil prices fell on Thursday as a build in USA crude inventories and record Saudi Arabian production reinforced fears of a persistent supply overhang that will last well into next year and keep weighing on markets.
Saudi Arabian oil production at almost 10.5 million barrels per day in July-a record high, above peak levels seen the same time previous year.
“Crude oil stocks rose 1.06 million barrels to 523.6 million barrels”.
“[That’s] great news for consumers, not so much for oil exporters, and oil company share prices that have rallied on the basis that oil prices are on their way back up again”.
USA crude stockpiles increased for a third week to 523.6 million barrels, the EIA reported Wednesday.
The IEA said refineries will process record volumes of crude this summer, drawing down those stocks and helping ease the remaining gluts in products and inventories – potentially raising prices. And with increasing OPEC production-in combination with the most recent U.S. data-it remains obvious that the global oil market remains oversupplied. The prevision goes against the recent forecast by the Organization of Petroleum Exporting Countries (OPEC) reported earlier today. Cooling some of the optimism looking forward, the group projected a drop in demand for 2017 on a downgrade growth forecasts.
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According to the OPEC monthly oil market report released on Wednesday, Nigeria’s oil production capacity dropped the most among OPEC members, while its gasoline (petrol) import has also been sliding.
