Crude Oil Prices Fell Sharply In Asian Trading, More Downside Is Limited
Mar 07 2017
Oil prices may struggle to breach $60 per barrel, regardless of how much OPEC cuts, if the USA keeps increasing production, according to a Reuters poll.
The Organization of the Petroleum Exporting Countries, Russia and other producers agreed late previous year to cut 1.8 million barrels a day from production to stabilize prices.
The capital of the US oil industry Houston is emerging from the price war sporting new downtown skyscrapers and the lingering glow from hosting last month's Super Bowl.
US crude oil rose on Friday as the market took a breather after three days of decline, but prices are being anchored by Russia's output remaining unchanged in February, indicating weak compliance on a global deal to cut supplies.
We therefore expect average oil prices for the year to be below those in January and February.
U.S. production has gained more than 550,000 barrels a day since the summer, rising above 9 million barrels a day for the first time since April.
"Oil prices are caught in a range right now".
United States stocks rose 1.5 million barrels to 520.2 million barrels, the highest ever at this time of year.
According to letter sent from Joint Monitoring Committee to the Energy Ministry, Azerbaijan fulfilled the obligation by 214%: "Azerbaijan is one of the countries playing leading role in this process and without contribution of such countries, OPEC and non-OPEC countries will fulfil the obligation less than 86%".
"We expect a balanced oil market in 2017 for the first time in almost three years", said Steve Pastor, president of BHP's petroleum business told Reuters. Saudi oil minister Khalid A. Al-Falih speaks Tuesday.
The OPEC Monthly Oil Market Report, released on February 13, showed that the cartel largely complied with the production cut agreement and fulfilled its pledges reaching a record-setting compliance in January.
Besides the rising US supplies, markets are also bracing for a interest rate increase by the Federal Reserve around the middle of this month, a move which could strengthen the dollar.