Oil prices dip on fears Middle East rift could harm OPEC cuts

An office worker walks past a logo of the Singapore Stock Exchange outside its premises in Singapore

An office worker walks past a logo of the Singapore Stock Exchange outside its premises in Singapore

Sentiment deteriorated further last week after data from oil-field services company Baker Hughes Inc. on Friday showed US oil drillers adding 11 more active rigs in the week ended June 2. The market expectation for crude stocks was a decline of 3.5 million barrels.

American crude production will average more than 10 million barrels a day in 2018, breaking a record nearly five decades old, according to the Energy Information Administration's monthly Short-Term Energy Outlook report Tuesday.

Nevertheless, prices drifted lower to the $47.60 p/b area ahead of the official inventories data with a slightly firmer dollar having some negative impact on prices.

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning.

OPEC and other producers including Russian Federation have pledged to cut about 1.8 million barrels per day (bpd) to help reduce global inventories.

Market participants will be watching to see if Qatar, a member of OPEC, decides to disrupt the production cutback deal.

Overnight, crude futures settled sharply lower, after data on Wednesday showed that supplies of USA crude rose for the first time in nine weeks, adding to concerns that rising United States oil output would undermine Opec and its allies' efforts to curb supply. Royal Dutch Shell (RDSA) dipped 0.2%.

Gasoline inventories also unexpectedly surged, imports increased, and exports dropped, the EIA data said.

West Texas Intermediate for July delivery slid 14 cents to $48.05 a barrel on the New York Mercantile Exchange as of 7:52 a.m.in London.

The United States has begun importing Iraqi oil at a rate of 1.1 million barrels per day to replace export cuts announced by Saudi Arabia late last month, new figures compiled by Bloomberg show.

Investors fear that should geopolitical tensions in the Middle East escalate, Qatar may abandon its production quota previously agreed under the OPEC deal, which could derail the global pact to extend production curbs until March.

Surplus oil in many parts of the world and developments with Qatar had traders nervous, even after Kuwait Oil Minister Essam al-Marzouq said Qatar remained committed to restricting crude output under an agreement between OPEC and several non-OPEC suppliers. The previous record average was 9.6 million barrels a day in 1970. The global Brent crude benchmark climbed as high as $50.74 on Monday in Asia before closing lower at $49.

Recommended News

  • An Aussie fond of cheeseheads: Jason Day all in on Wisconsin

    McIlroy added that he's played "eight or nine rounds" in the past 10 days, including two full 18-hole rounds at U.S. One of the reasons I wanted to play here is I knew it would be fun to play in front of your home crowd".
    Oddball musical Dear Evan Hansen wins six Tony awards

    Oddball musical Dear Evan Hansen wins six Tony awards

    Bette Midler was determined to get every last "thank you" in at the 2017 Tony Awards on Sunday night, play-off music be damned. Including the chutzpah to tell the Tony producers to " shut that crap off " when they tried to play her off stage with music .

    Bangladesh run to last four is reward for years of toil

    With their previous matches being washed out, both the teams needed a win to keep themselves alive in the tournament. We are asking everyone to do it and everyone is responding really well.
  • Why Is Dennis Rodman in North Korea (Again)?

    Yun was instructed to prepare to travel to Pyongyang with the intention of bringing Warmbier back to the United States. We want the world to know how we and our son have been brutalized and terrorized by the pariah regime in North Korea.

    May to form new government after losing parliamentary majority

    Jeremy Corbyn could have been Britain's next Prime Minister - if it wasn't for the performance of the Conservatives in Scotland. With 649 of 650 seats declared, the Conservatives had won 318 seats, short of the 326 needed for a parliamentary majority.

    Ralph Northam wins nomination; GOP race too close to call

    All six Virginia House of Delegates incumbents who were facing a primary challenger are headed to the November general election. Frank Wagner , the third wheel, hasn't made much of an impression during this campaign, nor has he brought in much cash.
  • US college student released by North Korea arrives in Ohio

    His four past trips in 2013 and 2014 generated a storm of publicity, most of it unfavorable, and did little in terms of diplomacy. US officials last had consular access to Warmbier on March 2, 2016, through the Swedish Embassy in Pyongyang, Nauert said.

    Mario+Rabbids: Battle Kingdom landing on Switch on August 29th

    In terms of showcasing the wide range of environments that players will explore, Assassin's Creed Origins doesn't look too bad. It also combines all that the fans love about Mario's iconic universe with the side-splitting antics of the Rabbids .
    Shaw, Broxton homer as Brewers beat Cards 8-5 to split DH

    Shaw, Broxton homer as Brewers beat Cards 8-5 to split DH

    It was his first hit since June 27, 2010 at Los Angeles, marking the eighth-longest streak between hits since 2000. Matt Carpenter homered, doubled and singled for the Cardinals, with his homer tying the score in the seventh.
  • Attorney General Jeff Sessions testifies on Russian Federation probe, Comey firing

    Democratic process. "If President Trump ordered you to fire Special Counsel Mueller, what would you do?" asked Sen. For one thing, the attorney general testified in a separate congressional hearing: "I have confidence in Mr.

    LeBron's finals triple double history doesn't ease loss

    STEPHANIE ABBATI: They play unselfish basketball every night, in and out, and I think that's why they are so unbelievable . The team had met, socialized and posed for pictures with Barack Obama after winning the title in 2015.
    Ex-NBA player Rodman expected to arrive in North Korea on Tuesday

    Ex-NBA player Rodman expected to arrive in North Korea on Tuesday

    His publicist also pointed out that Rodman was in the unusual position of being friends with both Mr Trump and Mr Kim. And Yun was dispatched to North Korea and visited Warmbier with two doctors on Monday, and demanded his release.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.