Oil prices pause after sharp falls

According to the IEA, non-OPEC supply will increase by nearly 1.5 million barrels a day in 2018, with about half of the expansion coming from United States crude production. Supply growth in 2018 could contribute to downward pressure in oil prices as early as late 2017.

USA shale oil production is increasing even after 123 companies have filed for bankruptcy after 2015.

In 2017, IEA expects USA crude supply to rise 430,000 b/d, and the year to end with production 920,000 b/d higher than year end 2016.

Brent for August settlement rose 4 cents to $46.96 a barrel on the London-based ICE Futures Europe exchange.

Oil slumped to the lowest close in seven months this week as concerns grew that rising US supplies will offset the production curbs by the Organization of Petroleum Exporting Countries and allies including Russian Federation.

"These are all signs of an oversupplied market". Last week, futures breached $45 as the EIA said gasoline supplies surged to the highest level since mid-March.

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USA gasoline inventories rose 2.1 million barrels in the week ended June 9, at a time when supplies should be declining seasonally, EIA data showed. Given the extended production cuts, EIA now forecasts OPEC members' crude oil production to average 32.3 million b/d in 2017 and 32.8 million b/d in 2018, down 0.2 million b/d and 0.4 million b/d, respectively, from the previous STEO. Major oil companies such as ExxonMobil and Chevron are still operating on shale oil fields but the results will be seen later in their balance sheet by the end of the year.

Overall, Brent crude prices have lost 13% and is expected to sink to the $47 level per barrel later this week and lower during the next of the year.

Tanker tracking by Bloomberg show nearly 9 million barrels of key crude grades Brent, Forties, Oseberg and Ekofisk crudes are now floating on Aframax vessels and crude supertankers off the U.K.'s coasts. The 2018 STEO forecast exceeds the previous record USA production level of 9.6 million b/d set in 1970.

"Current expectations indicate the market to rebalance in the fourth quarter of this year taking into account an increase in shale oil production", he said. Total volume traded was about 27 percent below the 100-day average.

US producers have ramped up more quickly than most were anticipating, undermining some of OPEC's efforts. If the rig count holds at current levels, the bank added, USA oil production would increase by 770,000 bpd between the fourth quarter of last year and the same quarter this year in the Permian, Eagle Ford, Bakken and Niobrara shale oil fields.

Talking about the future of oil, many economists have pointed out that in the next 10 years, oil-producing countries will face more economic problems if they do not expand their investments and diversify their sources of income. More than 52 million barrels a day have been loaded onto tankers this month, a record since at least 2012, they estimate.

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