Oil prices are on pace for their biggest daily percentage decline since early March, and USA crude oil production is expected to rise in both 2017 and 2018. Oil prices will increase as demand improves, chipping away at oil inventories in the second half, he said. Stocks have dropped sharply in the last several weeks and have fallen below levels seen at this time a year ago, but are still higher than where inventories have been in this decade. WTI rallied more than 1% early on Thursday after Saudi oil minister Khalid Al-Falih suggested major oil producers could extend their agreed upon cuts. U.S. West Texas Intermediate slipped 17 cents to $52.24 a barrel as of 10:49 a.m. EDT (1449 GMT), while Brent dropped 14 cents to $54.75 a barrel.
Iran will probably be allowed to keep its oil production unchanged if OPEC decides to extend its six-month agreement on output cuts beyond June, Kuwaiti Oil Minister Issam Almarzooq said, adding that the Persian Gulf OPEC member has shown strong compliance with the OPEC supply cut deal.
James Williams, president of energy consultant WTRG Economics in London, Arkansas, said the minister's bullish statement did not lift prices much because of growing US shale production. The US government's Energy Information Administration Wednesday reported a drawdown in commercial crude inventories for the week ended April 14, which should have been a bullish influence, but was overshadowed by a bearish build of 1.57 million barrels in gasoline stocks, against analyst expectations of a 2-million-barrel decline. US inventories of 532 million barrels remained near all-time records reached in March.
OPEC members Saudi Arabia and Kuwait signaled that the Organization of the Petroleum Exporting Countries and other producers, including Russian Federation, would likely extend their oil output cut beyond June.
"Rising oil output in the US remains the predominant bearish factor for prices despite growing anticipation that OPEC will extend a self-imposed cap on its oil production in the upcoming May meeting", Abhishek Kumar, senior energy analyst at Interfax Energy Global Gas Analytics said recently. Gasoline stocks posted a counter-seasonal build of 1.5 million barrels, despite heavier refining activity.
"Saudi's done a good job of managing the rhetoric", said Michael Hiley, a trader at LPS Futures LLC.