Oil stable on falling Libyan output, but bloated U.S. market still weighs
- Author: Adam Floyd Mar 31, 2017,
Mar 31, 2017, 1:48
Crude inventories rose 867,000 barrels (bbl) in the week ending March 24, compared with analysts' expectations for an increase of 1.4 MMbbl.
Gasoline inventories on the other hand fell by 3.7m barrels, while those of distillates decreased by 2.5m barrels.
Brent crude oil LCOc1 remained unchanged at $52.42 a barrel, while United States light crude oil CLc1 grew 5 cents to be traded at $49.56 per barrel, reported Reuters.
In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices. The market is positioning for a possible reversal in the incessant swell in USA crude stocks seen since the start of this year, as U.S. refineries ratchet up in the second quarter from their multi-year low operating rates.
Oil prices in Thursday's session remained firm, aided by falling crude output in Libya, and slip of gasoline stocks in US; but rising USA crude inventories still worries the oil market.
An unexpected disruption in Libyan crude output is helping oil investors shrug off record USA stockpiles that have undermined voluntary supply curbs by other Opec nations.More news: Who cleared Devin Nunes into the White House?
Prices for front-month Brent crude futures LCOc1 , the global benchmark for oil, were at $52.53 per barrel at 0445 GMT, up 11 cents from their last close. May WTI was changing hands around $49.47, 4 cents lower.
The news sparked some optimism among traders, but that will be short-lived unless OPEC decides to extend its production cut agreement into the second half of the year.
The production drop in Libya, which was pumping 700,000 barrels a day before the pipeline halt, is at least temporarily easing concern that rising US supply is offsetting the effect of curbs by the Organization of Petroleum Exporting Countries and its allies.
OPEC agreed in November a year ago to curb its output by about 1.2 million barrels per day between January and June. Six OPpec nations have joined with non-member Oman to voice support for prolonging their cuts past June.
USA refinery crude runs rose 425,000 barrels per day as utilization rates jumped 1.9 percentage points to 89.3 percent of capacity, the EIA data showed.
As OPEC and especially Saudi Arabia cut their production, other producers not participating in the cuts have been quick to fill the supply gap and gain market share.