The IEA estimates global supply will exceed demand by an average of 1.3 million barrels a day in the first six months of the year – down from the 1.5 million it projected a month ago – following surprisingly strong consumption in the first quarter, the agency said in its monthly oil market report.
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Oil prices fell today on profit- taking, after NY crude reached the highest level this year on signs that the global supply glut was easing. U.S. West Texas Intermediate (WTI) futures were down 44 cents at $44.22 a barrel.
USA crude production dropped to the lowest level since September 2014 last week while stockpiles declined for the first time in more than a month, according to an Energy Information Administration report Wednesday.
Oil sands companies around the Canadian energy hub of Fort McMurray began to restart operations at reduced rates on Tuesday after an out-of-control wildfire forced a week-long shutdown.
The staggering drop of 3.4 million barrels in USA crude oil stockpiles had overturned analysts’ expectation for the week that ended May 6 following a data from Energy Information Administration, reports Market Watch.
Moreover, political volatility in Libya has also helped support oil prices. Nigeria produced about 1.7 million barrels a day of crude oil in March, according to the Organization of the Petroleum Exporting Countries.
This is unexpected data to the market, as it is completely different from the inventory report released by the American Petroleum Institute. Prices are lower than last year due to milder winter weather in 2015-2016 compared to the previous year.
In early trading, New York’s benchmark contract reached United States dollars 47.02 a barrel – a highest point since early November.
Oil has rebounded after slumping to the lowest level since 2003 earlier this year on signs the global oversupply is easing as US output declines. Prices are up 3.3 per cent this week and more than 75 per cent higher than a February low. The contract climbed $2.08 to $47.60 on Wednesday. In London, Brent North Sea crude for July, the European benchmark, closed at US$47.60 a barrel, leaping US$2.08 from Tuesday.
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Crude Oil is trading slightly higher in limited price action, recovering from early session weakness. Last week, a major port was blocked, reducing the country’s oil production by 140,000 barrels to 220,000 barrels per day.
