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Oil slips below $52 as abundant supplies weigh

Reuters  |  LONDON 

By Alex Lawler

(Reuters) - slipped below $52 a barrel on Friday, giving up an earlier gain, as abundant crude supplies outweighed tighter U.S. fuel inventories and OPEC's plans to cut output.

Brent crude reached a 2016 high near $54 on Monday, underpinned by OPEC's Sept. 28 deal to reduce production, before weakening on rising U.S. crude stocks and as the Organization of the Petroleum Exporting Countries' own numbers showed output is still rising. [OPEC/M]

benchmark Brent was down 4 cents at $51.99 at 1328 GMT, having traded as high as $52.55 earlier. U.S. crude gained 20 cents to $50.64.

"The fundamental backdrop is still bearish," said Commerzbank analyst Carsten Fritsch. "Every increase is driven by speculation and optimism", rather than an actual tightening of supplies, he said.

U.S. crude inventories overall rose by 4.9 million barrels, the first increase in six weeks, the government's Energy Information Administration reported on Thursday.

But stocks at the Cushing delivery hub for U.S. crude futures declined and U.S. inventories of distillates, which include diesel and heating oil, fell by 3.7 million barrels. Gasoline stocks dropped by 1.9 million barrels. [EIA/S]

U.S. crude's structure gained support from the extended outage of a pipeline capable of delivering 450,000 barrels per day of crude into Cushing, traders said.

OPEC's plan is to cut its supply to between 32.5 million barrels per day (bpd) and 33 million bpd to help to balance supply and demand and revive prices that remain less than half of the levels reached in mid-2014.

However, a lack of much detail in the initial agreement, such as how much each of the 14 members can pump and the scale of any contributions from non-OPEC countries such as Russia, has left analysts sceptical.

"We are doubtful that OPEC's efforts, even if successful in achieving a targeted 32.5 million bpd in collective output, will prove sufficient to materially alter the balance and deliver a substantial reduction in inventories," BNP Paribas said in a report.

OPEC's own monthly report on Wednesday put production at 33.39 million bpd in September.

(Additional reporting by Henning Gloystein; Editing by David Goodman)

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

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Oil slips below $52 as abundant supplies weigh

LONDON (Reuters) - Oil slipped below $52 a barrel on Friday, giving up an earlier gain, as abundant crude supplies outweighed tighter U.S. fuel inventories and OPEC's plans to cut output.

By Alex Lawler

(Reuters) - slipped below $52 a barrel on Friday, giving up an earlier gain, as abundant crude supplies outweighed tighter U.S. fuel inventories and OPEC's plans to cut output.

Brent crude reached a 2016 high near $54 on Monday, underpinned by OPEC's Sept. 28 deal to reduce production, before weakening on rising U.S. crude stocks and as the Organization of the Petroleum Exporting Countries' own numbers showed output is still rising. [OPEC/M]

benchmark Brent was down 4 cents at $51.99 at 1328 GMT, having traded as high as $52.55 earlier. U.S. crude gained 20 cents to $50.64.

"The fundamental backdrop is still bearish," said Commerzbank analyst Carsten Fritsch. "Every increase is driven by speculation and optimism", rather than an actual tightening of supplies, he said.

U.S. crude inventories overall rose by 4.9 million barrels, the first increase in six weeks, the government's Energy Information Administration reported on Thursday.

But stocks at the Cushing delivery hub for U.S. crude futures declined and U.S. inventories of distillates, which include diesel and heating oil, fell by 3.7 million barrels. Gasoline stocks dropped by 1.9 million barrels. [EIA/S]

U.S. crude's structure gained support from the extended outage of a pipeline capable of delivering 450,000 barrels per day of crude into Cushing, traders said.

OPEC's plan is to cut its supply to between 32.5 million barrels per day (bpd) and 33 million bpd to help to balance supply and demand and revive prices that remain less than half of the levels reached in mid-2014.

However, a lack of much detail in the initial agreement, such as how much each of the 14 members can pump and the scale of any contributions from non-OPEC countries such as Russia, has left analysts sceptical.

"We are doubtful that OPEC's efforts, even if successful in achieving a targeted 32.5 million bpd in collective output, will prove sufficient to materially alter the balance and deliver a substantial reduction in inventories," BNP Paribas said in a report.

OPEC's own monthly report on Wednesday put production at 33.39 million bpd in September.

(Additional reporting by Henning Gloystein; Editing by David Goodman)

(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 slips below $52 as abundant supplies weigh

By Alex Lawler

(Reuters) - slipped below $52 a barrel on Friday, giving up an earlier gain, as abundant crude supplies outweighed tighter U.S. fuel inventories and OPEC's plans to cut output.

Brent crude reached a 2016 high near $54 on Monday, underpinned by OPEC's Sept. 28 deal to reduce production, before weakening on rising U.S. crude stocks and as the Organization of the Petroleum Exporting Countries' own numbers showed output is still rising. [OPEC/M]

benchmark Brent was down 4 cents at $51.99 at 1328 GMT, having traded as high as $52.55 earlier. U.S. crude gained 20 cents to $50.64.

"The fundamental backdrop is still bearish," said Commerzbank analyst Carsten Fritsch. "Every increase is driven by speculation and optimism", rather than an actual tightening of supplies, he said.

U.S. crude inventories overall rose by 4.9 million barrels, the first increase in six weeks, the government's Energy Information Administration reported on Thursday.

But stocks at the Cushing delivery hub for U.S. crude futures declined and U.S. inventories of distillates, which include diesel and heating oil, fell by 3.7 million barrels. Gasoline stocks dropped by 1.9 million barrels. [EIA/S]

U.S. crude's structure gained support from the extended outage of a pipeline capable of delivering 450,000 barrels per day of crude into Cushing, traders said.

OPEC's plan is to cut its supply to between 32.5 million barrels per day (bpd) and 33 million bpd to help to balance supply and demand and revive prices that remain less than half of the levels reached in mid-2014.

However, a lack of much detail in the initial agreement, such as how much each of the 14 members can pump and the scale of any contributions from non-OPEC countries such as Russia, has left analysts sceptical.

"We are doubtful that OPEC's efforts, even if successful in achieving a targeted 32.5 million bpd in collective output, will prove sufficient to materially alter the balance and deliver a substantial reduction in inventories," BNP Paribas said in a report.

OPEC's own monthly report on Wednesday put production at 33.39 million bpd in September.

(Additional reporting by Henning Gloystein; Editing by David Goodman)

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

image
Business Standard
177 22

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