"These trends along with the steady decline in oil in floating storage, indicate that the rebalancing of the market is underway, but at a slower pace, given the changes in fundamentals since December, especially the shift in US supply from an expected contraction to positive growth", the report read. However, that optimism seems to be fading amid higher production from the United States and reports of impatience within the OPEC with lower oil price. "OPEC should rethink its strategy of trying to verbally and artificially drive oil prices higher, because the result of that strategy is very resilient US production".
As a result, OPEC raised the expected demand for its crude this year by 100,000 bbl/d to 32.02 million bbl/d. Prices initially nudged higher after the world's top exporter Saudi Arabia outlined cuts to customers in July that included a reduction of 300,000 barrels per day (bpd) to Asia. Last year, there were considerable doubts as to whether a cutback deal was in fact even possible; and now OPEC has renewed it for another nine months!
"I still believe we'll have some record-breaking weeks for driving season demand but as I've stressed before, the peak driving season is clustered in 10 weeks between late June and Labor Day weekend", said Tom Kloza, global head of energy analysis at the Oil Price Information Service.
Refinery crude runs also rose 29,000 bpd and utilization rates rose 0.3 percentage point to 94.4 percent of total capacity. That's down from 14 million barrels in the same period in May. The nation's shale-oil explorers, who first triggered the glut OPEC is trying to contain, have emerged more efficient from the oil market's three-year slump. In 2016, the top three crude oil producing countries were Saudi Arabia (10.46 mb/d), Russian Federation (10.29 mb/d) and the United States (8.88 mb/d).
"The numbers cast serious, serious doubt on whether there will be another hike this year", said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in NY.
Halep Into Second French Open Final
It's a habit that players tend to grow out of, when the importance of winning changes, but for now she goes for broke. In Saturday's championship match, the 47th-ranked Ostapenko will face Simona Halep of Romania, who got past 2016 U.S.
With regards to the prices, the ASB indicated that the OPEC Reference Basket averaged $40.76/b in 2016, down from $49.49/b in 2015 and reaching the lowest yearly average since 2004. New supplies from OPEC's competitors will be more than enough to meet growth in demand next year, the IEA said in a report Wednesday.
Martijn Rats, head of oil research at Morgan Stanley, said Opec was facing a major headache.
The increases were driven by Hess Corp and Apache Corp, which had previously remained unhedged.
Iraq is gaining the edge over Saudi Arabia in the world's fastest-growing oil consumer amid an intensifying race among producers to retain their most-prized markets.