OPEC analysts predicted that the crude oil market is likely to remain oversupplied due to the increment in new oil production fields in non-OPEC countries.
Advertisement
Gains in crude prices could also be capped by rising crude exports from Libya after the country’s National Oil Corporation (NOC) said on Tuesday it would immediately start working to resume crude exports from ports seized in recent days by forces loyal to eastern commander Khalifa Haftar.
At around 0315 GMT, US benchmark West Texas Intermediate for delivery in October was up 21 cents to United States dollars 45.11 and Brent crude for November added 18 cents to USD 47.28 a barrel.
“The market could care less about strong physical markets when it sees potential for another 600,000 barrels per day of crude”, Scott Shelton, broker with ICAP in Durham, North Carolina, said, referring to the anticipated rise in Libyan and Nigerian supplies. An increase in exports by these two countries would be a major oil-market development ahead of talks in Algeria at the end of this month among OPEC members to cap output.
Year-over-year demand growth for the third quarter of 2015 was at 2.3 million barrels a day, he said. “That is the big question today”, the IEA wrote in its closely watched monthly oil market report. The outlook is not clear nor rosy, the agency said.
“Increasing supply expectations crisscrossing the downward adjustments in global demand, that keeps global inventories on an upward track into new high territory”, he said.
Crude prices fell about 3 per cent for a second straight day on Wednesday following a 4.6 million barrel build in USA distillates inventories.
Oil prices rose as much as 2 percent on Thursday, tracking a surge in gasoline futures and higher USA equity markets that helped stem a two-day rout in crude futures.
U.S. West Texas Intermediate futures were down 73 cents, or 1.7 per cent, at $43.18 a barrel, a two-week low.
On Tuesday, crude futures settled down 3 percent after the world’s energy watchdog and OPEC both revised forecasts that signaled the global crude glut could persist much longer than expected.
During the last five trading sessions, crude prices have dropped by around 8% and concerns are still growing due to a return in supplies expected from Libya and Nigeria.
Saudi Arabia became the world’s largest oil producer last month as USA output continued to slide.
Advertisement
Brent crude dipped to $46.48 per barrel after the opening bell on Wednesday, down from $47.10 per barrel at the closing bell on Tuesday. Distillate fuel inventories, however, recorded a more substantial increase, of 4.6 million barrels, after rising by 3.4 million barrels in the week before.
