Oil prices fell nearly 2 percent yesterday, ending the longest surge
in global benchmark crude, the Brent crude in 16 months, which lasted
several weeks, amid the sale of profit taking and with the return of
concerns over the oversupply.
Brent crude futures fell $ 1.03 to $ 55.97 a barrel, losing 1.8 percent in the past week and ending a five-week winning streak, the longest
since June 2016.
WTI fell $ 1.30, or 2.6 percent, to $ 49.49 per barrel, ending the
week down more than 4 per cent, the biggest weekly loss in four months.
The oil markets were cautious yesterday as traders watched a tropical
storm heading for the Gulf of Mexico as Chinese markets remained closed
for a week long holiday.
But
the prospect of extending OPEC oil cuts led by Saudi Arabia and other
producers led by Russia has helped boost crude oil prices, but there are
still concerns about the growth of US crude exports driven by a large
WTI discount to prices Brent crude, and the rise of the dollar also led to the oil market suffered further losses yesterday.
The
activity was limited due to China's "Golden Week" holiday and the
monitoring of the tropical storms Nite, which led to the closure of
refineries and production stops on the Gulf of Mexico just weeks after
the region was hit by a number of hurricanes. Major oil companies
including Exxon Mobil, Chevron, Royal Dutch Shell In withdrawing its employees from production platforms on the Gulf of Mexico.
Saudi Arabia, OPEC's biggest producer, has not made a strong
commitment to extend an agreement between OPEC, Russia and other
producers to cut supplies, but has confirmed it is "flexible" over
proposals to extend the deal until the end of 2018.
The agreement to cut oil production by 1.8 million bpd came into force in January and is due to expire at the end of March 2018.
With
the possibility of extending the cuts, analysts raise their
expectations for crude prices. "We are optimistic about our forecast for
Brent, as we adjusted our annual average for 2018 to $ 57 a
barrel and our longerterm forecast to $ 73 a barrel by 2022," said BMI.
, From $ 55 a barrel to $ 70 a barrel in the past. "
This comes after the US Energy Information Administration said that
"US crude exports jumped to 1.98 million barrels per day last week,
exceeding the record high of the previous week and reached 1.5 million
barrels per day."
Crude inventories in the United States fell sharply last week, while
gasoline stocks rose, distillate stocks fell, and crude stocks fell 6
million barrels in the week ending September 29, against analysts'
forecasts for a 756,000 bpd drop.
Crude refinery consumption fell 145,000 barrels per day, with
operating rates down 0.5 percentage points. Gasoline inventories rose
1.6 million barrels, while analysts polled forecast a 1.1 million barrel
rise.
According to the Energy Information Administration, distillate stocks,
including diesel and heating oil, fell 2.6 million barrels against a
forecast of 1.8 million barrels.
US crude oil imports fell 706,000 barrels to 5.23 million barrels per
day last week. The US Petroleum Institute said US crude inventories in
the United States fell last week as imports fell
while gasoline inventories rose.
Oil prices are unlikely to rise much this year, above a two-year high
this month, analysts said, as analysts fear that US oil production
growth will hinder the restoration of balance between global oil supply
and demand.
Brent crude is expected to average $ 52.60 per barrel in 2017,
slightly above the previous forecast of $ 52.53, and in 2018 the average
price of crude is expected to average $ 54.40 a barrel from the
previous month's forecast of $ 54.48.
The
monthly survey of 36 analysts and economists expected the average price
of Brent crude to be more than $ 60 a barrel by 2020, and Brent reached
its highest level since July 2015, driven by demand for refined
products and assessments that the oil market is recovering quickly after
production cuts. Led by the Organization of Petroleum Exporting Countries (OPEC).
US
crude oil production is expected to increase for the 10th consecutive
month in October to 6.1 million barrels per day, and Daniela Corsini,
economic specialist for the commodities market at Intesa San Paolo,
predicts that the rise in oil production and the production of Libya and
Nigeria will continue. The main threat to OPEC's efforts to restrict global supply.
"In
view of its impact on US futures prices, rock oil will be the most
effective tool in restoring equilibrium and will help keep crude prices
within a relatively narrow range," Corsini said.
