Oil and Gas News | Oil and Gas Jobs | Oil and Gas Engineering
The Oil & Gas Hub
  • Main
  • News
  • Photo
  • Video
  • Oilfield Jobs
  • Learning Section
  • Oil & Gas Calculator

Oil slips on oversupply worries despite OPEC deal

2017.05.30
1 783

Oil prices fell on Tuesday, pressured by concerns that production cuts by the world's big exporters may not be enough to drain a global glut that has depressed the market for almost three years.

Benchmark Brent crude LCOc1 was down 45 cents a barrel at $51.84 by 1000 GMT (6 a.m. ET), having gained 14 cents on Monday. U.S. light crude CLc1 was 25 cents lower at $49.55.

The Organization of the Petroleum Exporting Countries and other oil producers, including Russia, agreed last week to keep a tight rein on supply until the end of the first quarter of 2018, nine months longer than originally planned.

Collective output by OPEC and other producers will be held around 1.8 million barrels per day (bpd) below its level at the end of last year.

But the cutbacks have yet to drain inventories significantly and prices fell after the OPEC deal was announced.

"Investors haven't made up their minds if OPEC has done enough to balance supply and demand," said Carsten Fritsch, senior commodities analyst at Commerzbank in Frankfurt.

"Today's losses follow gains yesterday, so overall oil prices have been rather flat this week."

Part of the problem for OPEC is oil supply in the United States, where shale production is booming.

U.S. drillers have added rigs for 19 straight weeks to reach 722, the highest since April 2015, according to services firm Baker Hughes (BHI.N).

Goldman Sachs analysts have reduced their forecasts for oil prices, saying that falling U.S. production costs will keep supply rising for years to come.

The bank said that once OPEC's production growth resumes after its self-imposed cuts, U.S. and OPEC output would rise by 1 million to 1.3 million bpd between 2018 and 2020.

"While we are bullish on near-term prices as inventories normalize ... 2018-19 futures need to be in the $45-$50 range," Goldman said.

The American summer driving season, which by tradition started on the Memorial Day holiday on Monday, may offer some support for prices, analysts said.

Demand in the United States for transport fuels tends to rise as families visit friends and relatives or go on vacation during the Northern Hemisphere summer.

The American Automobile Association said ahead of Memorial Day that it expects 39.3 million Americans to travel 50 miles (80 km) or more over the Memorial Day weekend, the highest Memorial Day mileage since 2005.

Related Posts

Weekly Energy Digest - May 6th,2025
2025.05.06
180
Weekly Energy Digest - May 6th,2025
Oil benchmarks declined for most of the week, with fears of further OPEC+ output cut rollbacks compo…
Weekly Energy Digest - April 30th,2025
2025.04.30
382
Weekly Energy Digest - April 30th,2025
Oil prices fell for the week on the back of OPEC+ members’ discussion about an additional supp…
Weekly Energy Digest - April 22th,2025
2025.04.22
542
Weekly Energy Digest - April 22th,2025
Oil benchmarks recorded their first weekly gain in 3 weeks. Oil markets spent most of the week seeki…
Weekly Energy Digest - April 15th,2025
2025.04.15
723
Weekly Energy Digest - April 15th,2025
Oil prices continued their decline this week, reaching four-year lows due to escalating US-China tra…
Market quotes are powered by TradingView.com
© Oil and Gas News | Oil and Gas Jobs | Oil and Gas Engineering, 2025
ADVERTISE  | Contact Us  | Privacy Policy  
Made in studio Zuber