OPEC and other key producers including Russian Federation agreed to slash output in November, part of an attempt to eliminate a global oil glut and boost prices.
Low oil prices has also pulled China's import to its peak as data showed that China has imported 212 million tonnes of crude oil or 8.55 million bpd in the first six months of the year, higher by 13.8 percent on the same period in 2016 making the country the world's largest crude importer ahead of US. "For fellow OPEC members, who agreed to reduce production by 1.2 million barrels per day, to see their cut effectively diluted by almost two-thirds must be very frustrating, especially as their pact has, hitherto, been well observed by historical standards", said the IEA analysts. The IEA seemed to ignore improvement from non-OPEC oil producers that joined in the pact that saw their compliance improve.
On Wednesday, September WTI crude oil settled at $45.66, up $0.43 or +0.95% and October Brent crude oil ended the session at $48.03, up $0.22 or +0.46%.
It's like I said before, losing money on every barrel and trying to make up for it in volume is not a sustainable business plan.
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Whereas crude oil inventories in the USA dropped 7.6 million barrels in the week to July 7 to 495.35 million barrels, the biggest since the week ended September 4 suggesting that a decrease in the global glut is happening despite the current supply overhang. There was a 34,000 barrel increase from Alaska.
Up strongly in Asia Wednesday, the advance cooled by the end of USA trading as continued growth in oil output there underpinned the views that US producers remain resilient amid low prices. They must use it or lose it. We will ultimately find stability in this market. For all of 2017, total demand is now forecast at 98 million barrels a day, up by 1.4 million barrels a day compared to 2016. This is the most oil Libya had produced since April 2014.
Crude oil futures dipped Thursday even after US government data confirmed a sharp decline in domestic crude supplies for a second week in a row. The SPR has been giving the market a false sense of security that oil supply is not draining as quickly as it is but is the market paying attention.
OPEC members Libya and Nigeria were exempted from the cuts due to years of unrest that have sapped their output. "We all agreed that we should continue these meetings", he added. We also expect to see upward revisions in EIA gas demand data that was under-reporting demand earlier in the year. Investors now demand higher yields and lower prices to get deals done, reports a Financial Times article, forcing energy companies to do more refinance-driven bond deals, where shareholders have restructured their equity holdings to a safer and more comfortable position. The consensus is 59, which is well below the five-year average for this week.
Crude oil prices reached their lowest year-to-date levels in late June.