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Oil edges higher as OPEC boost offsets dent from U.S. supply

Reuters  |  LONDON 

By Libby George and Amanda Cooper

(Reuters) - edged higher on Wednesday as OPEC said it was committed to eroding a surplus of crude, but increasing shale production in the United States and still-high stocks threatened to pull prices lower.

Brent crude futures were up 19 cents at $55.08 a barrel at 1331 GMT, while U.S. crude futures were up 15 cents at $52.56.

Crude fell in the previous two sessions, but it received a boost from comments on Wednesday by the secretary-general of the Organization of the Petroleum Exporting Countries that the group was committed to cutting inventories to the five-year average.

Analysts warned that prices could quickly turn negative.

"It seems that the optimism in the market we have seen since the last few days of March is running out of steam," wrote Tamas Varga, PVM Associates analyst, noting concerns about the "ever-increasing rise" in U.S. shale output.

OPEC and other producers such as Russia agreed to cut output by almost 1.8 million barrels per day in the first half of 2017 to drain a supply overhang that has persisted for nearly three years.

The cuts, and talk of a possible extension, enabled a rally in major contracts of some 10 percent between March 22 and April 12, Varga said.

Geopolitical concerns have also helped underpin

This week, U.S. President Donald Trump ordered a review of whether the lifting of sanctions against Iran was in the United States' national interests. A lifting of certain sanctions against Iran in late 2015 under a nuclear deal allowed Tehran to more than double its crude exports over 2016.

But U.S. stockpiles - and shale production - have cast doubt on whether the production cuts were enough. Data from the American Petroleum Institute showed on Tuesday that although crude inventories fell by 840,000 barrels in the week to April 14, they remained near record highs.

Gasoline stocks also posted a counter-seasonal build of 1.4 million barrels. Gasoline margins have since come under downward pressure, which analysts warned could undermine crude prices as well.

Official U.S. data is due to be published on Wednesday by the Energy Information Administration (EIA).

"Unless the (EIA) data shows something drastically different, this report should cause a severe dent in the bullish case (for prices)," said Sukrit Vijayakar, director of energy consultancy Trifecta.

(Additional reporting by Henning Gloystein in Singapore and Alex Lawler in London; editing by; Editing by Dale Hudson)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Oil edges higher as OPEC boost offsets dent from U.S. supply

LONDON (Reuters) - Oil edged higher on Wednesday as OPEC said it was committed to eroding a global surplus of crude, but increasing shale production in the United States and still-high global stocks threatened to pull prices lower.

By Libby George and Amanda Cooper

(Reuters) - edged higher on Wednesday as OPEC said it was committed to eroding a surplus of crude, but increasing shale production in the United States and still-high stocks threatened to pull prices lower.

Brent crude futures were up 19 cents at $55.08 a barrel at 1331 GMT, while U.S. crude futures were up 15 cents at $52.56.

Crude fell in the previous two sessions, but it received a boost from comments on Wednesday by the secretary-general of the Organization of the Petroleum Exporting Countries that the group was committed to cutting inventories to the five-year average.

Analysts warned that prices could quickly turn negative.

"It seems that the optimism in the market we have seen since the last few days of March is running out of steam," wrote Tamas Varga, PVM Associates analyst, noting concerns about the "ever-increasing rise" in U.S. shale output.

OPEC and other producers such as Russia agreed to cut output by almost 1.8 million barrels per day in the first half of 2017 to drain a supply overhang that has persisted for nearly three years.

The cuts, and talk of a possible extension, enabled a rally in major contracts of some 10 percent between March 22 and April 12, Varga said.

Geopolitical concerns have also helped underpin

This week, U.S. President Donald Trump ordered a review of whether the lifting of sanctions against Iran was in the United States' national interests. A lifting of certain sanctions against Iran in late 2015 under a nuclear deal allowed Tehran to more than double its crude exports over 2016.

But U.S. stockpiles - and shale production - have cast doubt on whether the production cuts were enough. Data from the American Petroleum Institute showed on Tuesday that although crude inventories fell by 840,000 barrels in the week to April 14, they remained near record highs.

Gasoline stocks also posted a counter-seasonal build of 1.4 million barrels. Gasoline margins have since come under downward pressure, which analysts warned could undermine crude prices as well.

Official U.S. data is due to be published on Wednesday by the Energy Information Administration (EIA).

"Unless the (EIA) data shows something drastically different, this report should cause a severe dent in the bullish case (for prices)," said Sukrit Vijayakar, director of energy consultancy Trifecta.

(Additional reporting by Henning Gloystein in Singapore and Alex Lawler in London; editing by; Editing by Dale Hudson)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Business Standard
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Oil edges higher as OPEC boost offsets dent from U.S. supply

By Libby George and Amanda Cooper

(Reuters) - edged higher on Wednesday as OPEC said it was committed to eroding a surplus of crude, but increasing shale production in the United States and still-high stocks threatened to pull prices lower.

Brent crude futures were up 19 cents at $55.08 a barrel at 1331 GMT, while U.S. crude futures were up 15 cents at $52.56.

Crude fell in the previous two sessions, but it received a boost from comments on Wednesday by the secretary-general of the Organization of the Petroleum Exporting Countries that the group was committed to cutting inventories to the five-year average.

Analysts warned that prices could quickly turn negative.

"It seems that the optimism in the market we have seen since the last few days of March is running out of steam," wrote Tamas Varga, PVM Associates analyst, noting concerns about the "ever-increasing rise" in U.S. shale output.

OPEC and other producers such as Russia agreed to cut output by almost 1.8 million barrels per day in the first half of 2017 to drain a supply overhang that has persisted for nearly three years.

The cuts, and talk of a possible extension, enabled a rally in major contracts of some 10 percent between March 22 and April 12, Varga said.

Geopolitical concerns have also helped underpin

This week, U.S. President Donald Trump ordered a review of whether the lifting of sanctions against Iran was in the United States' national interests. A lifting of certain sanctions against Iran in late 2015 under a nuclear deal allowed Tehran to more than double its crude exports over 2016.

But U.S. stockpiles - and shale production - have cast doubt on whether the production cuts were enough. Data from the American Petroleum Institute showed on Tuesday that although crude inventories fell by 840,000 barrels in the week to April 14, they remained near record highs.

Gasoline stocks also posted a counter-seasonal build of 1.4 million barrels. Gasoline margins have since come under downward pressure, which analysts warned could undermine crude prices as well.

Official U.S. data is due to be published on Wednesday by the Energy Information Administration (EIA).

"Unless the (EIA) data shows something drastically different, this report should cause a severe dent in the bullish case (for prices)," said Sukrit Vijayakar, director of energy consultancy Trifecta.

(Additional reporting by Henning Gloystein in Singapore and Alex Lawler in London; editing by; Editing by Dale Hudson)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

image
Business Standard
177 22