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Oil prices slip as growing global stocks overshadow Opec cuts

In the United States, rising output has helped push up crude and fuel stocks to record highs

Reuters  |  London 

Oil prices slip as growing global stocks overshadow Opec cuts

slipped on Friday, pressured by growing global stocks, while expectations that an output cut by producers might eventually balance the market helped to underpin prices.

futures were trading at $55.42 per barrel at 14:48 GMT, 23 cents below their last close.

West Texas Intermediate (WTI) crude futures were down 17 cents at $53.19 per barrel.

Both appeared on track for losses on the week, though prices had moved higher earlier in the session in response to news that producer group the Organisation of the Petroleum Exporting Countries (Opec) could extend an output cut aimed at reining in a global supply overhang.

The and other producers, including Russia, agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by the is around 90 per cent.

The cuts are aimed at curbing oversupply that has dogged since 2014.

But inventories and supplies remain high, especially in the

"You've got bullishness from the cuts, but the bearishness of the inventory report," Hamza Khan, head of commodities strategy at ING, said. "The question is, which of these is going to give first?"

Brent and have traded within a $5 per barrel price range this year, in what has become the longest and most range-bound period since a price slump began in mid-2014.

In the United States, rising output has helped push up crude and fuel stocks to record highs.

In Asia, flows into the region remain as high as they were before the production cuts, Thomson Reuters data shows, as exporters fight for market share.

There are also signs of faltering demand growth in core China, and the

In India, fuel demand growth fell in January, while in sagging car sales and soaring gasoline and diesel exports also point to a slowdown in growth. gasoline cracks slid to a one-year low on Friday on fears of excess supply and weakening demand growth.

Despite the supply glut, analysts expect to tighten in the longer term.

"In the fourth quarter of 2018, global demand will most likely surpass 100 million barrels per day," AB Bernstein said on Friday in a note to clients.

"If prices stay around $60 per barrel and GDP (gross domestic product) growth over 3 per cent per annum, then demand growth will be stronger over the next 5 years than the previous decade. What we are witnessing is a rather surprising renaissance of consumption," it said.

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Oil prices slip as growing global stocks overshadow Opec cuts

In the United States, rising output has helped push up crude and fuel stocks to record highs

In the United States, rising output has helped push up crude and fuel stocks to record highs
slipped on Friday, pressured by growing global stocks, while expectations that an output cut by producers might eventually balance the market helped to underpin prices.

futures were trading at $55.42 per barrel at 14:48 GMT, 23 cents below their last close.

West Texas Intermediate (WTI) crude futures were down 17 cents at $53.19 per barrel.

Both appeared on track for losses on the week, though prices had moved higher earlier in the session in response to news that producer group the Organisation of the Petroleum Exporting Countries (Opec) could extend an output cut aimed at reining in a global supply overhang.

The and other producers, including Russia, agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by the is around 90 per cent.

The cuts are aimed at curbing oversupply that has dogged since 2014.

But inventories and supplies remain high, especially in the

"You've got bullishness from the cuts, but the bearishness of the inventory report," Hamza Khan, head of commodities strategy at ING, said. "The question is, which of these is going to give first?"

Brent and have traded within a $5 per barrel price range this year, in what has become the longest and most range-bound period since a price slump began in mid-2014.

In the United States, rising output has helped push up crude and fuel stocks to record highs.

In Asia, flows into the region remain as high as they were before the production cuts, Thomson Reuters data shows, as exporters fight for market share.

There are also signs of faltering demand growth in core China, and the

In India, fuel demand growth fell in January, while in sagging car sales and soaring gasoline and diesel exports also point to a slowdown in growth. gasoline cracks slid to a one-year low on Friday on fears of excess supply and weakening demand growth.

Despite the supply glut, analysts expect to tighten in the longer term.

"In the fourth quarter of 2018, global demand will most likely surpass 100 million barrels per day," AB Bernstein said on Friday in a note to clients.

"If prices stay around $60 per barrel and GDP (gross domestic product) growth over 3 per cent per annum, then demand growth will be stronger over the next 5 years than the previous decade. What we are witnessing is a rather surprising renaissance of consumption," it said.
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Business Standard
177 22

Oil prices slip as growing global stocks overshadow Opec cuts

In the United States, rising output has helped push up crude and fuel stocks to record highs

slipped on Friday, pressured by growing global stocks, while expectations that an output cut by producers might eventually balance the market helped to underpin prices.

futures were trading at $55.42 per barrel at 14:48 GMT, 23 cents below their last close.

West Texas Intermediate (WTI) crude futures were down 17 cents at $53.19 per barrel.

Both appeared on track for losses on the week, though prices had moved higher earlier in the session in response to news that producer group the Organisation of the Petroleum Exporting Countries (Opec) could extend an output cut aimed at reining in a global supply overhang.

The and other producers, including Russia, agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by the is around 90 per cent.

The cuts are aimed at curbing oversupply that has dogged since 2014.

But inventories and supplies remain high, especially in the

"You've got bullishness from the cuts, but the bearishness of the inventory report," Hamza Khan, head of commodities strategy at ING, said. "The question is, which of these is going to give first?"

Brent and have traded within a $5 per barrel price range this year, in what has become the longest and most range-bound period since a price slump began in mid-2014.

In the United States, rising output has helped push up crude and fuel stocks to record highs.

In Asia, flows into the region remain as high as they were before the production cuts, Thomson Reuters data shows, as exporters fight for market share.

There are also signs of faltering demand growth in core China, and the

In India, fuel demand growth fell in January, while in sagging car sales and soaring gasoline and diesel exports also point to a slowdown in growth. gasoline cracks slid to a one-year low on Friday on fears of excess supply and weakening demand growth.

Despite the supply glut, analysts expect to tighten in the longer term.

"In the fourth quarter of 2018, global demand will most likely surpass 100 million barrels per day," AB Bernstein said on Friday in a note to clients.

"If prices stay around $60 per barrel and GDP (gross domestic product) growth over 3 per cent per annum, then demand growth will be stronger over the next 5 years than the previous decade. What we are witnessing is a rather surprising renaissance of consumption," it said.

image
Business Standard
177 22