Oil prices fall on higher OPEC production
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Oil prices fell yesterday after the Organisation of Petroleum Exporting Countries (OPEC) said its production had risen to the highest level in at least eight years and following reports of an increase in Inuted States (U.S.) crude stockpiles.
Brent crude futures were trading at $51.46 per barrel at 0645 GMT, down 35 cents, or 0.68 per cent, from their previous close.
U.S. West Texas Intermediate (WTI) crude was down 42 cents, or 0.84 per cent, at $49.76 per barrel.
Traders said oil markets had come under pressure after the OPEC reported a rise in output, despite the cartel’s plans, potentially with non-OPEC producer Russia, to cut production in a bid to rein in a global glut.
“Crude responded predictably, with both Brent and WTI falling,” said Jeffrey Halley of brokerage OANDA.
OPEC had two days ago reported its oil production climbed in September to the highest in at least eight years, and raised its forecast for 2017 non-OPEC supply growth, pointing to a larger surplus next year despite the group’s proposal to cut output.
The group pumped 33.39 million barrels per day (bpd) last month, up 220,000 bpd in August.
“In the absence of any OPEC-Russia headlines to give crude its daily adrenaline shot, the market looks nervously to the Energy Information Administration (EIA) crude inventory figures due in the U.S. this evening,” Halley said.
The EIA is due to publish official storage inventory data later yesterday.
The private American Petroleum Institute reported two days ago that U.S. crude inventories rose by 2.7 million barrels to 470.9 million barrels in the week to Oct. 7. This would be the first rise in oil stocks following five straight weeks of declines.
“Seasonally softer gasoline consumption, flagging demand from China and the return of refineries from maintenance will likely drive up global stock levels over Q4,” BMI Research said, but added that it did not see stocks returning to last year’s highs.
But the market received some support from China, which imported record volumes of crude oil last month, eclipsing the U.S. as the world’s top buyer of foreign oil for the third time in a year, in a trend that could soon put the Asian nation at the top of the world’s oil import table permanently.
China’s September crude imports rose 18 per cent from a year earlier to 33.06 million tonnes, or 8.04 million bpd on daily basis, customs data showed, compared with the U.S. four-week average of 7.98 million bpd.
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