Oil up after United States inventories drop

Khalid al-Falih, Saudi Arabia's energy minister, was quoted in the Financial Times saying he expected OPEC to extend its production deal until at least the end of 2017 when they meet on 25 May, stating the cartel is prepared to do "whatever it takes" to bring about an end to low oil prices.

US energy firms added oil rigs for a 16th week in a row last week extending a drilling recovery into a 12th month, energy services firm Baker Hughes Inc said on Friday.

Global benchmark Brent crude LCOc1 settled up $1.49 a barrel, or 3 percent, to $50.22 a barrel.

Oil prices rose on Wednesday after a larger than expected fall in USA crude inventories and on attempts by Opec to rebalance an oversupplied market by cutting output.

According to Opec's latest monthly report a large part of the excess supply overhang contained in floating storage facilities has been reduced and the improvement in the world economy should help support oil demand too.

The bullish inventories report came in after crude prices dipped 1% when EIA highlighted its near-term outlook for US oil production and reiterates its estimates for oil prices.

Exchange-traded funds linked to oil prices, continued to climb today as crude prices remained on track to end the week in the green amid data showing that the US crude glut is shrinking and OPEC's production cuts are making a dent in global supplies. Additionally, investors were also demonstrating a lack of confidence in OPEC's ability to rebalance the market through planned production cuts.

Oil prices rose on Monday on a growing conviction that an OPEC-led production cut initially scheduled to end in June would be extended to cover all of 2017, although a relentless increase in US drilling activity is seen capping gains.

Oil major Saudi Aramco has told Asian refiners it will reduce supplies by about seven million barrels in June.

Non-cartel producers led by Russian Federation partially matched the cuts.

A third source said an extension of up to one year could be an option.

Oil is now changing hands near $50 again and it seemed that OPEC is likely losing its grip to influence prices as a new wave of new supply is striking the market from Texas to Libya.

Falih said recent price falls had been caused by seasonal low demand and refinery maintenance, as well as by non-OPEC production growth, especially in the United States.

Meanwhile, Brent crude oil, the global benchmark, is up 1.9% at $49.89 per barrel on Wednesday, and has lost 12.4% this year.

Related Articles

  • LeBron, Cavaliers back in familiar territory

    We came out with a lot of pride, a lot of grit, a lot of toughness, that never-quit attitude. Casey "helped me be me, a better man, a better basketball player", said Lowry.
    Recent Exits Have Little Effect on Iran's Presidential Election

    Recent Exits Have Little Effect on Iran's Presidential Election

    Rouhani was a key architect of the 2015 nuclear deal with the USA , the European Union and other partners. If no candidate takes more than 50%, however, a runoff between the top two finishers will be held May 26.
    Elderly Man Charged With Shooting Amtrak Conductor In Naperville

    Elderly Man Charged With Shooting Amtrak Conductor In Naperville

    Charges have been filed against a Wisconsin man for allegedly shooting an Amtrak conductor in Naperville on Tuesday, May 16th. Edward Klein, 79, was charged with discharge of a firearm causing great bodily harm and attempted murder.
  • Gregg Popovich knocks Spurs for 'lack of edge, intensity' in Game 2

    With Leonard's status for the remainder of the series in limbo, Pachulia was extremely apologetic for what occurred. Wright of ESPN wrote about the Spurs troubles in Game 2 , and quoted Aldridge on his poor performance.
    Celtics, Lakers, 76ers have plenty riding on the National Basketball Association  lottery

    Celtics, Lakers, 76ers have plenty riding on the National Basketball Association lottery

    The Boston Celtics now hold the first overall selection in this year's NBA Draft - a pick they likely will not hold on to. The draft is considered a strong one, loaded with point guards such as Markelle Fultz, Lonzo Ball and De'Aaron Fox.
    Swedish prosecutor drops rape probe against Wikileaks founder Julian Assange

    Swedish prosecutor drops rape probe against Wikileaks founder Julian Assange

    In documents filed to the Stockholm District Court, Prosecutor Ny said legal obstacles had prevented the case from moving forward. US President Donald Trump last month said he would support any decision by the Justice Department to charge Assange.
  • Russian FM mocks US media over intelligence-sharing reports

    Russian FM mocks US media over intelligence-sharing reports

    President Donald Trump had disclosed classified intelligence during a meeting with Russian officials. McMaster, who said it was " wholly appropriate " to divulge that to the Russians.

    How to Shield Your System Against WannaCry Ransomware Attack

    The term ransomware refers to malicious software that infects or locks a computer, preventing access to files. The good news is, these attacks are preventable if you keep your software up to date and your guard up.

    Cornyn among 4 interviewing for FBI director

    If confirmed, his role as Senate Majority Whip would be up for grabs. "I don't think we're there yet", Arizona Sen. John Barrasso, a Republican from Wyoming, said he thought Cornyn "would have been a great choice".
  • Mnuchin Says U.S. Reserves Right To Be Protectionist

    Mnuchin Says U.S. Reserves Right To Be Protectionist

    Greece's creditors, including the European Central Bank and the International Monetary Fund, will be in Bari . Mnuchin is taking the opportunity to lay out the Trump administration's views on trade.
    Jadhav has 150 days: Pak

    Jadhav has 150 days: Pak

    This morning, Attorney General Mukul Rohatgi, expressed optimism saying that India has the upper hand in the matter. India has further claimed that Jadhav was kidnapped from Iran where he was involved in a business undertaking.

    Congress seeks Comey testimony as Russian Federation turmoil engulfs Trump

    Trump himself hasn't directly addressed the latest allegations that he pressured Comey to drop the Flynn investigation. Obama's security team asked for Trump's sign-off, as the plan would likely take place after Trump's inauguration.