Oil prices slip despite news of lower Saudi supply
08 Aug 2017 - 16:50
A man stands to wait for refueling for his car at Cosmo Energy Holdings' Cosmo Oil service station in Tokyo, Japan, December 16, 2015. (REUTERS/Yuya Shino/File Photo)
LONDON: Oil prices fell on Tuesday on increasing exports from key OPEC producers despite news of lower crude shipments from Saudi Arabia.
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.
Libya is exempt from limits on production agreed by most other members of the Organization of the Petroleum Exporting Countries designed to bolster oil prices that have been depressed for more than three years by a global glut.
Oil production remains high in many parts of the world and fuel prices are around half the level seen in 2011-2014.
Benchmark Brent crude was down 40 cents a barrel at $51.97 a barrel by 1330 GMT. U.S. light crude was 40 cents lower at $48.99.
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 on Tuesday.
“Support is coming from a stabilising US rig count, falling US inventories and the Saudi cut in exports,” Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank, told the Reuters Global Oil Forum.
“But against this we still have robust production growth from the United States, Libya and Nigeria.”
A recent recovery in Libya’s oil output, and higher production in Nigeria, have complicated OPEC’s efforts to curb supply, fuelling doubts over the effectiveness of agreed cuts.
Libya pumped 1.03 million bpd in July, according to the latest Reuters survey. OPEC output hit a 2017-high in July and its exports were at record levels.
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 were expected to have posted their sixth straight weekly decline last week, while refined product stockpiles probably fell too, a preliminary Reuters poll showed on Monday.
Oil output in the United States has risen this year, although Baker Hughes data on Friday showed a cut of one drilling rig in the week to Aug. 4.