On the ICE Futures Exchange in London, Brent oil for November delivery touched a session low of $45.68 a barrel, a level not seen since September 2.
Advertisement
US output in August stood at 12.2 million barrels a day, including natural gas liquids, according to the IEA. The estimate of a global demand for OPEC oil of 32.48 million barrels a day is 530,000 barrels a day below last month’s forecast. The timing of the world oil market’s return to balance is “the big question”, the IEA said in its monthly report, adding that current prices – above Dollars 45 – would suggest supply falling and strong demand growth.
“The IEA data is also suggesting that an OPEC “freeze” will not be enough to rebalance the market in 2017″, he said in a note to investors.
Exxon has filled storage facilities at its Qua Iboe export terminal in Nigeria and is awaiting government clearance to resume shipments, a person familiar with the matter said Wednesday. The biggest US shale oil company, Continental Resources, dropped 5.7 percent.
Saudi Arabia became the world’s largest oil producer last month as US output continued to slide. The wider the spread, the bigger the market’s perception of oversupply. “Next week’s report will be telling, whether last week’s lost barrels finally show up in the petroleum balance sheet”, said John Kilduff, partner at NY energy hedge fund Again Capital.
Prior to the IEA’s report, OPEC also revised upwards its projections for supplies from non-OPEC producers in 2017.
The agency said Tuesday that the global oversupply of crude oil would last until the second half of 2017.
The IEA said shrinking investment could help the markets to rebalance.
The increase by Iran, which has been recovering from years of economic sanctions following the worldwide agreement limiting its nuclear program, has been swifter than the IEA expected. Is it possible to predict the oil market at all?
Later Wednesday, Libya’s National Oil Corporation said it would double production within four weeks after it was handed control of crucial ports that had been seized by forces loyal to the country’s rival administration. Rigs targeting crude in the USA have had the biggest return to activity since oil began falling two years ago, and Kazakhstan’s giant Kashagan field is expected to start output this year, adding to the oversupply.
Advertisement
Financial shares fell on weakened prospects of an interest rate hike in the near-term, adding to the early negative tone in U.S. stocks, which were down more than one per cent.
