The figures suggest USA oil production, particularly from shale, is beginning to decline in response to the collapse in prices over the a year ago.
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The energy component pared its losses, after the OPEC’s Secretary-General, Abdalla Salem el-Badri, stated that global investments in Crude Oil will fall by $130-B this year, thus reducing the global supply glut.
Crude oil prices were up more than 2 percent on the day on the back of Novak’s weekend statement and a rise in USA gasoline prices, Reuters reports.
Investors are awaiting USA government data on crude inventories this week. Refinery utilization rates fell by 2.3 percentage points.
West Texas Intermediary bounced 1.5% to US$49.25 a barrel. Its session peak, a penny shy of $52, was the highest since September 3.
Badri, who spoke in London on Tuesday, was said to have expressed concern about the impact of low oil prices on investment and the consequences for future supply, but insisted that rebalancing the world oil markets was the responsibility of all producers and not a burden to be borne by OPEC alone. “More and more supply will come from hard areas with high costs”.
Russia, one of the world’s top three oil producers, said on the weekend it was prepared to meet OPEC and non-OPEC oil producers to discuss the market if such a gathering is called. The contract gained 1.6 percent in the previous session.
Wells Fargo analysts said in a research report that “As the slow adjustments in supply and demand in the oil market persist, 2016 is likely to bring more large swings in prices, without much upward price trend”. The nation pumped 9.1 million barrels a day during the same period, the lowest level since November.
The American Petroleum Institute industry group will issue at 4:30 p.m. (2030 GMT) preliminary data on USA crude inventories for last week, before official numbers on Wednesday from the Energy Information Administration (EIA).
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Demand for oil is expected to go up to 270,00 bpd or to 95.2 million barrels every day, which is up 0.3% from last month’s forecast. Data on Friday showed US energy firms reduced the number of oil rigs by 26 in the latest week, the biggest cut since April and the fifth straight weekly fall, a sign low prices were pushing drillers away from the well pad.
