Oil buckles as concern grows over battle of OPEC vs U.S. shale

When the OPEC deal was reached late previous year, Libyan oil production stood at about 600,000 bpd.

Thirteen OPEC members and 11 non-OPEC countries, led by Russian Federation, had agreed on November 30, 2016 to reduce their production by about 1.8 million barrels per day (bpd) for six months beginning from January in an effort to drain a glut of crude that held down prices for over two years.

USA oil production has gained more than 10 percent since mid-2016 to 9.3 million bpd, close to the levels of top producers Russian Federation and Saudi Arabia.

For 2018, the EIA's growth forecast is 650,000 bpd, down from its previous forecast of 680,000 bpd.

Oil capped a third weekly decline on Friday after dropping to levels last seen before the Organization of Petroleum Exporting Countries agreed in November to reduce output.

A statement by Saudi energy minister on extension of oil cut agreement will be good news Nigeria, PREMIUM TIMES can report.

Crude oil futures fell Tuesday, unable to sustain a brief recovery after the government predicted higher USA production for the next two years.

Falih said recent price falls had been caused by seasonal low demand and refinery maintenance, as well as by non-OPEC production growth, especially in the United States.

If you are a believer of a successful and prolonged extension of the OPEC and non-OPEC output cut pledges, you can definitely invest in regular and leveraged oil or energy exchange-traded products for gains, at least for the short term.

But countering those efforts, USA drillers added oil rigs for a 16th week in a row last week, extending a drilling recovery into a 12th month, energy services firm Baker Hughes Inc said last Friday.

But "an unintended effect of the agreement that will continue to hit OPEC's market share is that less Arab Gulf supply has led to a tightening of the Brent-Dubai/Oman [price] spread and for Dubai/Oman to trade at a premium to WTI", he said.

Authorities in the UAE, Saudi Arabia and Kuwait have signaled that an agreement to extend limits on OPEC output may be in sight.

Oil Storage Tanks at Cushing, OKOil held gains before government data forecast to show USA crude stockpiles fell for a fifth week, further reducing an inventory surplus.

The EIA's latest monthly report calls for OPEC oil supply at an average 39.43 million barrels a day this year and at 40.23 million next year.

Total world supply is expected to reach 98.47 million barrels this year and 100.40 million in 2018, the EIA said.

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