Published: Wed, May 16, 2018
Culture&Arts | By Laurence Reese

Oil prices fall on signs of ample supply despite OPEC cuts

Oil prices fall on signs of ample supply despite OPEC cuts

West Texas Intermediate, the US marker, is $3.21 a barrel below Middle East benchmark Dubai. West Texas Intermediate was up 0.86% to $71.89 a barrel.

The cartel also said its output rose slightly last month, mainly via Saudi Arabia, but raised its demand forecast for next year by 25,000 barrels per day to average 98.85 million barrels per day.

Growth in USA output, meanwhile, has tamed price moves for US benchmark crude in recent sessions, preventing it from notching a fresh multiyear high.

Oil prices ended a shade firmer after retreating from multi-year highs hit early in the day on Tuesday, supported by concerns that US sanctions on Iran are likely to restrict crude exports from one of the biggest producers in the Middle East.

More news: Gwyneth Paltrow's Teenage Daughter Apple Looks So Grown-Up In Latest Photo

The United States has announced it will impose sanctions on Iran over its nuclear program, raising fears that markets will face shortages later this year when trade restrictions take effect.

The tightening market has all but eliminated a global supply overhang that depressed crude prices between late 2014 and early 2017.

Stronger oil prices are also spilling into other markets.

The data poses worries that near-record high refinery runs may be short-lived. If demand growth continues to be strong-as now expected-an already tight oil market could become even tighter amid geopolitical concerns, driving oil prices further up.

More news: Stan Lee Files $1 Billion Lawsuit Against POW! Entertainment

Crude demand is now expected to increase by 1.4 million barrels per day, down from the previous prognosis of 1.5 million bpd, as a price rise of around 75% since last June to the current level of about $77 per barrel for Brent crude is expected to impact consumption.

"A rising oil price brings upside price risk to all commodities", Morgan Stanley said in a note to clients this week.

Despite these downward forces, the market retains support from OPEC and other producers' production cuts and US sanctions on Iran. China's crude oil imports in the first quarter increased by 7 percent on the year to around 9.09 million bpd-a rise of nearly 595,000 bpd on average compared to Q1 2017, according to Reuters calculations.

Global oil supplies could be hit by the decision by the USA to pull out of the Iran nuclear deal, and also by falling production in crisis-hit Venezuela, the IEA said on Wednesday.

More news: Presenting … a Vegan Take on the Royal Wedding Cake!

Like this: