Oil falls for third day as higher inventories, dollar weigh

Ann Santiago
March 2, 2018

Now the U.S.is on track to dethrone in the coming months the world's current leader in oil production: Russian Federation. Both are expected to show a slight fall in US production.

OPEC and non-OPEC producers agreed to voluntary output cuts at the end of 2016.

The session lows for both benchmarks were the lowest prices in two weeks.

Another country eager to boost production, albeit lacking the economic wherewithal to do so, is Venezuela: president Nicolas Maduro over the weekend once again took to the state-controlled airwaves to promise viewers that "I think that in the first half of this year, we will have recovered 70 percent of production".

US light crude CLc1 is forecast to average $58.88 a barrel in 2018, up from $58.11 in the January poll.

On the demand side, Birol said the IEA expected growth of around 1.4 million bpd in 2018.

The oil prices turned down on Tuesday, due to fears that rising United States oil production will overshadow greater demand and confidence in OPEC and its allies' ability to curb supply.

US forecasts also suggest that the American oil production will beat both Saudi Arabia and Russian Federation this year, assuming that the OPEC/non-OPEC deal remains intact until the end of 2018, as now planned. Analysts had expected an increase of 2.1 million barrels. This is higher than Saudi Arabia's current production of just below 10 million bpd.

"Agreements have been already signed that allows discussions to start on the configuration of the refinery, on design basis and pre-feasibility studies", he said, adding during his two-day visit discussions were held about the commitment of Aramco to west coast refinery. USA crude oil production increased steadily through 2017, reaching its highest level in more than three decades. It is reported the VLCC LOOP-loaded crude oil cargo is destined for China.

Chinese oil imports from Russian Federation and Angola fell in December, by 61,000 and 178,000 barrels per day, respectively, while imports from Saudi Arabia increased by 53,000 barrels per day.

"U.S. shale growth is very strong".

Saudi Energy Minister Khalid al-Falih said on Saturday that the country's crude production in January to March would be well below output caps, with exports averaging less than 7 million barrels per day, according to Reuters.

The nations taking part in the supply curbs are now studying what a crude re-balancing will entail, and will announce their next steps once that's analyzed. Thus given that the oil price is now at $64 is near resistant then the oil price should soon reverse lower to target $58 which is likely to be the trend for most of March 2018 before the next assault on the high as my longer term 2018 forecast for a $80 crude oil price remains in tact.

Other reports by

Discuss This Article