NEW YORK, Aug 8 — Oil prices fell today, pulling back from recent gains as exports from key OPEC producers rose and despite news of lower crude shipments from Saudi Arabia.
The crude market has been in consolidation mode after a sharp rally between mid-June and late July that pushed US crude futures above US$50 (RM214) a barrel for the first time in several weeks. Since then, crude has traded around that number as world supply has been slow to draw down.
“It’s just unable to break above US$50,” said Kyle Cooper, consultant for ION Energy in Houston. “It’s boring, but there’s a fundamental justification for prices being stuck between US$45 and US$55 without a significant geopolitical event.”
Benchmark Brent crude was down 21 cents a barrel at US$52.16 a barrel at 10:59 a.m. EDT (1459 GMT). US light crude was 20 cents lower at US$49.19 a barrel.
Crude oil exports from the Organisation of the Petroleum Exporting Countries hit a record in July, largely because of gains in Nigeria and Libya, two countries that are exempt from the agreement to limit production that is slated to continue through March 2018.
The recovery in Libya’s oil output and higher production in Nigeria have complicated OPEC’s efforts to curb supply, fueling doubts over the effectiveness of agreed cuts.
Saudi state oil company Aramco will cut allocations to its customers worldwide in September by at least 520,000 barrels per day (bpd), sources familiar with the matter told Reuters today.
Libya pumped 1.03 million bpd in July, according to the latest Reuters survey. Production from Libya’s 270,000 bpd Sharara field is returning to normal after a disruption when protesters broke into a control room, the National Oil Corp said.
Oil production remains high in many parts of the world and fuel prices are around half what they were in 2011-2014. A number of US shale drillers, in reporting second quarter earnings, highlighted efforts to improve drilling efficiencies to boost profits, but largely expect to keep pumping oil.
Officials from a joint OPEC and non-OPEC technical committee met in Abu Dhabi on Tuesday to discuss ways to increase compliance with the deal to cut 1.8 million bpd in production.
The US Energy Information Administration, part of the Energy Department, will release its weekly petroleum status report at 1430 GMT on Wednesday, giving details on stockpiles and refinery runs.
US crude inventories last week were expected to have declined for a sixth straight week, while refined product stockpiles probably fell too, a preliminary Reuters poll showed on Monday. — Reuters