Oil Falls on Report Showing OPEC Deal Compliance Falling in July

Oil prices fell on Friday after a consultancy report forecast a rise in OPEC production for July despite the group’s pledge to curb output, reigniting concerns the market will stay awash with crude.

Petro-Logistics, which tracks OPEC supply forecasts, said OPEC crude production would rise by 145,000 barrels per day (bpd) this month, taking the group’s combined output above 33 million bpd.

Higher supply from Saudi Arabia, the United Arab Emirates (UAE) and Nigeria would drive this month’s gains, it said.

The news weighed on oil prices which had been trading in positive territory for most of the session.

International benchmark Brent crude futures fell 40 cents to $48.90 per barrel by 8:56 a.m. ET (1256 GMT). U.S. West Texas Intermediate (WTI) crude futures were 39 cents lower at $46.53 per barrel.

During the previous trading session both benchmarks rose to their highest levels since early June in choppy trading, having been pushed higher by data released on Wednesday showing U.S. crude and fuel inventories fell sharply last week.

Despite the drop, U.S. oil stocks, at roughly 490 million barrels, remain well above the five-year average, while U.S. production has increased almost 12 percent since mid-2016 to 9.4 million bpd.

Investors were also taking positions ahead of a meeting between OPEC and non-OPEC members in Russia on Monday at which they will discuss compliance with agreed production cuts and progress towards rebalancing an oversupplied market.

read more/source: http://www.cnbc.com/2017/07/20/oil-nudges-up-hovers-below-50-level-ahead-of-opec-meeting.html

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