Futures in New York rose slightly Friday but headed for a weekly drop of 1.1 percent. While U.S. crude production jumped to 10.4 million barrels a day last week, according to government data, the dire situation in Venezuela’s energy sector may exacerbate a worldwide supply deficit expected later this year, the Paris-based IEA said.
Oil has been trading in a tight range this month, with prices hovering around $60 a barrel as rising U.S. output continues to stoke fears that a shale boom will limit price increases. Still, the Organization of Petroleum Exporting Countries and allied producers are continuing production cuts in an effort to drain a global glut and help prop up prices. A robust global economy has also led banks including Goldman Sachs Group Inc. to project strong demand for oil this year.
The IEA raised its estimate for global oil demand growth by 90,000 barrels a day to 1.5 million a day in 2018 as a stronger outlook for developed economies offsets weakening expectations for emerging nations. Steady growth was also reflected in the American Petroleum Institute’s latest report showing U.S. oil consumption rose to the highest in 11 years even as crude production hit a new monthly record.
As a result of a worsening economic crisis in Venezuela, where output has fallen to the lowest since the 1940s, the market could tip from a glut into a shortage, the IEA said. OPEC is collectively cutting supply by almost 50 percent more than it intended, the agency said.
more at: https://www.bloomberg.com/news/articles/2018-03-16/oil-set-for-weekly-loss-as-u-s-shale-boom-counters-iea-warning