Oil falls after failed North Korean missile test, USA rig count gains

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Oil futures fell during the trading session, touching their lowest in 11 days as the USA government reported that shale oil output in May was expected to post the biggest monthly increase in more than two years.

U.S. crude oil production has climbed to 9.24 million barrels per day, according to the latest Energy Information Administration data, making it the world's third-largest producer after Russian Federation and Saudi Arabia. The EIA added that total motor gasoline inventories increased by 1.5 million barrels last week and are now near the upper limit of the average range.

U.S. West Texas Intermediate slipped 17 cents to $52.24 a barrel as of 10:49 a.m. EDT (1449 GMT), while Brent dropped 14 cents to $54.75 a barrel.

Oil prices regained some ground on Thursday, after steep losses in the previous session, as leading Gulf oil producers signaled a likely extension of OPEC-led supply cuts beyond the middle of the year.

Opec and several other producers including Russian Federation agreed in December to pump less oil in an orchestrated effort to end an oversupply weighing on prices.

World oil demand growth in 2016 was kept broadly unchanged at 1.38 million barrels per day (mb/d), averaging 95.05 mb/d.

While US shale output may come "roaring back" amid higher crude prices, production curbs by Opec and its allies should help offset that increase over the next six to nine months, said the Citi analysts including Ed Morse and Seth Kleinman.

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That brought the total count to 683, the most since September 2015, underlining concern that an ongoing rebound in US shale production could derail efforts by other major producers to rebalance global oil supply and demand.

Volumes were thin, with about 152,000 Brent futures contracts and about 296,000 WTI contracts changing hands, less than half of Thursday's trading volumes. The surprise build, along with an increase in United States output and imports from OPEC, pressured prices.

U.S. crude oil production reached 9.24 MMbpd, according to the latest Energy Information Administration data, making it the world's third-largest producer after Russian Federation and Saudi Arabia.

Moscow has not stated whether it supports prolonging the curbs, although Energy Minister Alexander Novak said this month that Russian Federation would soon start consultations with its own oil producers about the possibility of doing so.

The U.S. drill rig count climbed to 683 last week, the highest since April 2015 and a 13th week of gains, Baker Hughes data showed on Friday.

Citi analysts say the increase in U.S. shale production should be offset by extending production curbs agreed between the Organization of the Petroleum Exporting Countries (OPEC) and other major exporters led by Russian Federation.

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