Oil rises on Libyan supply disruptions, likely OPEC output cut extension

Jon Howard
April 5, 2017

OPEC and several nonmember oil producers meeting in Kuwait say they have agreed to review whether an agreement to cut supplies should be extended by six months.

West Texas Intermediate (WTI) futures, the US benchmark, were up 50 cents at $48.23 a barrel.

"Lower oil prices are going to force OPEC into a decision to extend their production cuts for another six months", speculated Andy Lipow, president of energy consulting firm Lipow Oil Associates.

He added, however, that US shale producers will be monitoring developments closely, contributing to the "bearish factor which is overhanging the market".

Energy Minister Noureddine Boutarfa is optimistic that a "clear impact" of the deal will be noticed in the next couple of weeks and hopes that the ministerial monitoring committee will recommend the extension of the freeze for at least three or four months.

OPEC and non-OPEC oil producers are considering cutting oil output further, according to a statement released on Sunday, following a meeting in Kuwait to assess progress with the global pact to cut oil supplies.

Samsung Galaxy S8+ prototypes show dual-camera setup
The install process should be familiar to anyone who's used to adding unofficial apps that aren't on the Google Play Store. While the Taiwanese manufacturer lacks Apple or Samsung's resources, it loves to innovate design in new ways.

Thus, the total crude oil production cut will amount to 1.7-1.8 mln barrels per day in the first half of this year. Year to date, WTI crude futures trade down by around 10%.

"The chances remain high for an extension to the supply cuts, as long as there are more stockpile withdrawals", he said. Data from the U.S. Energy Information Administration shows that U.S. oil inventories, for example, are still way above their five year range. Consensus forecasts were for a build of just over 1.0 million barrels on the week and the overall market reaction was very limited.

Concerns surrounding U.S. over-supply were never far from the surface and crude closed the United States session significantly off the highest levels of the day with WTI around $48.30 from a peak near $48.70.

Prices for front-month Brent crude futures LCOc1, the global market benchmark, gained 55 cents to $51.30 per barrel by afternoon, while West Texas Intermediate were up 50 cents at $48.23 a barrel. Most of its members are facing budgetary deficits, while countries like Venezuela, which depend on oil exports for most of their budget, have entered a period of depression and stagnation.

Crude oil sold for over $100 a barrel in the summer of 2014, before bottoming out below $30 a barrel in January 2016.

US crude oil production has already risen 8.3 percent since mid-2016 to 9.13 million barrels per day (bpd).

Other reports by PlayStation Move reviews

Discuss This Article

FOLLOW OUR NEWSPAPER