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Oil hits 3-month lows as OPEC reports rising stocks, Saudi output jump

Reuters  |  LONDON 

By Edmund Blair

(Reuters) - prices slid to three-month lows on Tuesday after OPEC reported a rise in crude stocks and a surprise jump in production from its biggest member, Saudi Arabia, despite output curbs by the group.

The kingdom, the world's biggest exporter, led OPEC to supply cuts announced last year. Signs of even modestly higher Saudi output flustered investors.

Brent futures were down 91 cents at $50.44 a barrel by 1421 GMT, after touching $50.33, their lowest since Nov. 30. U.S. crude slid $1 to $47.40 a barrel, after also dropping to its lowest since November at $47.28.

Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.

"The focus on pushing production back to 10 million bpd after cutting beyond the call of duty in January is a key driver," Harry Tchilinguirian, head of strategy at BNP Paribas, told Forum.

"Saudi was the one compensating for the lack of compliance of others," he said.

prices have now reversed almost all the gains notched since OPEC said on Nov. 30 that it was cutting output. Investors have been focusing on inventory data after OPEC said its cuts aimed to stabilise prices and draw down stockpiles.

The Organization of the Petroleum Exporting Countries said in its monthly report that stocks in industrialised nations rose in January to stand 278 million barrels above the five-year average, with U.S. shale and other non-OPEC supply gaining.

Weekly data due on Tuesday from the American Petroleum Institute (API) is expected to show another rise in U.S. inventories, following last week's report that revealed a bigger-than-expected increase.

"A sniff of another big crude build and down we go towards $45," said Matt Stanley, commodities broker at Freight Investor Services.

With stockpiles growing, investors are seeking indications that OPEC will extend reductions beyond June.

Saudi ally Kuwait said on Monday it would support an extension of the deal. Minister Essam al-Marzouq said an extension would "help bring prices to acceptable levels for oil-producing nations and the industry in general."

has yet to indicate clearly whether it is ready to extend supply curbs.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson and David Clarke)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Oil hits 3-month lows as OPEC reports rising stocks, Saudi output jump

LONDON (Reuters) - Oil prices slid to three-month lows on Tuesday after OPEC reported a rise in global crude stocks and a surprise jump in production from its biggest member, Saudi Arabia, despite output curbs by the group.

By Edmund Blair

(Reuters) - prices slid to three-month lows on Tuesday after OPEC reported a rise in crude stocks and a surprise jump in production from its biggest member, Saudi Arabia, despite output curbs by the group.

The kingdom, the world's biggest exporter, led OPEC to supply cuts announced last year. Signs of even modestly higher Saudi output flustered investors.

Brent futures were down 91 cents at $50.44 a barrel by 1421 GMT, after touching $50.33, their lowest since Nov. 30. U.S. crude slid $1 to $47.40 a barrel, after also dropping to its lowest since November at $47.28.

Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.

"The focus on pushing production back to 10 million bpd after cutting beyond the call of duty in January is a key driver," Harry Tchilinguirian, head of strategy at BNP Paribas, told Forum.

"Saudi was the one compensating for the lack of compliance of others," he said.

prices have now reversed almost all the gains notched since OPEC said on Nov. 30 that it was cutting output. Investors have been focusing on inventory data after OPEC said its cuts aimed to stabilise prices and draw down stockpiles.

The Organization of the Petroleum Exporting Countries said in its monthly report that stocks in industrialised nations rose in January to stand 278 million barrels above the five-year average, with U.S. shale and other non-OPEC supply gaining.

Weekly data due on Tuesday from the American Petroleum Institute (API) is expected to show another rise in U.S. inventories, following last week's report that revealed a bigger-than-expected increase.

"A sniff of another big crude build and down we go towards $45," said Matt Stanley, commodities broker at Freight Investor Services.

With stockpiles growing, investors are seeking indications that OPEC will extend reductions beyond June.

Saudi ally Kuwait said on Monday it would support an extension of the deal. Minister Essam al-Marzouq said an extension would "help bring prices to acceptable levels for oil-producing nations and the industry in general."

has yet to indicate clearly whether it is ready to extend supply curbs.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson and David Clarke)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
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Oil hits 3-month lows as OPEC reports rising stocks, Saudi output jump

By Edmund Blair

(Reuters) - prices slid to three-month lows on Tuesday after OPEC reported a rise in crude stocks and a surprise jump in production from its biggest member, Saudi Arabia, despite output curbs by the group.

The kingdom, the world's biggest exporter, led OPEC to supply cuts announced last year. Signs of even modestly higher Saudi output flustered investors.

Brent futures were down 91 cents at $50.44 a barrel by 1421 GMT, after touching $50.33, their lowest since Nov. 30. U.S. crude slid $1 to $47.40 a barrel, after also dropping to its lowest since November at $47.28.

Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.

"The focus on pushing production back to 10 million bpd after cutting beyond the call of duty in January is a key driver," Harry Tchilinguirian, head of strategy at BNP Paribas, told Forum.

"Saudi was the one compensating for the lack of compliance of others," he said.

prices have now reversed almost all the gains notched since OPEC said on Nov. 30 that it was cutting output. Investors have been focusing on inventory data after OPEC said its cuts aimed to stabilise prices and draw down stockpiles.

The Organization of the Petroleum Exporting Countries said in its monthly report that stocks in industrialised nations rose in January to stand 278 million barrels above the five-year average, with U.S. shale and other non-OPEC supply gaining.

Weekly data due on Tuesday from the American Petroleum Institute (API) is expected to show another rise in U.S. inventories, following last week's report that revealed a bigger-than-expected increase.

"A sniff of another big crude build and down we go towards $45," said Matt Stanley, commodities broker at Freight Investor Services.

With stockpiles growing, investors are seeking indications that OPEC will extend reductions beyond June.

Saudi ally Kuwait said on Monday it would support an extension of the deal. Minister Essam al-Marzouq said an extension would "help bring prices to acceptable levels for oil-producing nations and the industry in general."

has yet to indicate clearly whether it is ready to extend supply curbs.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson and David Clarke)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22