Oil prices fall on OPEC output increase, rising US crude stocks (BP.)

The state refiner buys about 4 million tons of Iraqi grades annually on a term basis which matches the volume it gets from Saudis

The state refiner buys about 4 million tons of Iraqi grades annually on a term basis which matches the volume it gets from Saudis

After basing the legitimacy of its initial crude cutback initiative, and more recently its extension, on the argument that it was resulting in an imminent market rebalance, the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday admitted that the recovery is now underway at a "slower pace" - and that the cartel's output in May increased due to Nigeria and Libya being exempt from the deal.

Saudi Arabia, the world´s top oil exporter, is leading an effort by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by nearly 1.8 million barrels per day (bpd) until the end of the first quarter of 2018 in order to prop up prices.

Benchmark Brent crude LCOc1 was 17 cents lower at $48.12 per barrel by 1236 GMT, reversing gains made earlier in the session when it edged up to $48.67.

Adding to the supply surplus is rising USA production from shale drillers that has pushed US output up by 10 percent over the a year ago to 9.3 million bpd, not far below levels by top exporter Saudi Arabia.

Oil prices have slipped 14 percent in NY this year as hopes that supply curbs by OPEC and partners such as Russian Federation would end a three-year surplus have given way to concern that the cuts aren't deep enough and that USA shale drillers will fill any shortfall.

This was "due to changes in fundamentals, especially the shift in United States supply from a forecast contraction to positive growth", the report said.

US crude inventories remain stubbornly high.

Last month Opec extended a six-month agreement to curb production by a further nine months to attempt to bring inventories down to nearer average levels and support oil prices.

"By some accounts this increase is a troubling threat to Opec compliance, but we note that it was driven by 352,000 bpd of additional supply from Libya and Nigeria", wrote Tim Evans, energy analyst at Citigroup.

Brent has dropped back below $50 since the OPEC meeting.

US drilling activity has continued apace, driving up USA output by more than 10 percent since mid-2016 to above 9.3 million bpd.

Traders said market intelligence firm Genscape had forecast a draw down of more than 1.8 million barrels at the Cushing, Oklahoma delivery point for USA crude futures. The figures added to market pressure after a report from the American Petroleum Institute that estimated domestic crude stocks rose by a more-than-expected 2.8 million barrels in the week ending June 9.

Recommended News

  • North Korea frees American student; parents say he's in coma

    Secretary of State Rex Tillerson said the State Department had secured Mr Warmbier's release at the direction of the president. He was arrested for purposely placing a Bible in the restroom of a nightclub, which is a violation of North Korean law.

    Warriors beat Cavaliers to win title

    During the trophy ceremony, Kerr said, "I want to say a special thank you to Mike Brown and my whole coaching staff". The first-time title victor scored 39 points as point guard Stephen Curry posted 34 at the Oracle Arena in Oakland.
    British Pound Remains Lower After UK Election

    British Pound Remains Lower After UK Election

    Conservative supporters also said Brexit had been the most important factor in their decision, as did Liberal Democrat voters. Without the amendments, he said Labour would try to vote down the speech. "I am delighted to see Labour do so well.
  • Fecteau: Trump's Toxic Reversal on Climate Change

    Fecteau: Trump's Toxic Reversal on Climate Change

    Among the many critics of Trump's decision to withdraw was Al Gore, the former vice president and Nobel Peace Prize victor . The United States is the second biggest producer of greenhouse gases - a key factor that is causing climate change.

    Did Lebron James deserve to be voted NBA Finals MVP?

    In fact, Durant was mentioned more than 1 million times on Twitter during the series-clinching Game 5 win Tuesday night. But as far as that team , they're going to be here for a while. "This is Golden State's era".

    Golden State Are 2017 NBA Champs, Rout Cavaliers 4-1

    KD was relentless on both sides of the court, playing a menacing defence and igniting the league's best offence. He finished with averages of 33.6 points, 12.0 rebounds and 10.0 assists in the five-game series.
  • Former NBAer Dennis Rodman Is Back in North Korea

    A senior administration official said the Trump administration did not authorize Rodman's trip. "We are aware of his visit", Mr. He made headlines after befriending North Korean leader Kim Jong-un on previous trips to Pyongyang in 2013 and 2014.
    Action Shooter SUPERHOT VR Coming To PlayStation VR This Summer

    Action Shooter SUPERHOT VR Coming To PlayStation VR This Summer

    With all of the skepticism surrounding VR at this year's E3, it was a bold move for Sony to reveal so many VR titles. Given the fact that Sony's E3 conference is coming up this evening, however, it's an interesting turn of events.
    Cameron Diaz gushes over husband: 'I feel so lucky'

    Cameron Diaz gushes over husband: 'I feel so lucky'

    She also added that both of them rely on each other's strengths and they complement each other better. For her, it just so happened that she was in her forties when she met her life partner, Benji .
  • 5 key takeaways from Attorney General Jeff Sessions' testimony

    5 key takeaways from Attorney General Jeff Sessions' testimony

    When Senator Ron Wyden opened his five minutes of floor time by saying, "People are sick of stonewalling ", Sessions grew testy. Sessions' answer echoed, but did not illuminate, the account of former Federal Bureau of Investigation director James Comey .

    Comey's 'smoking gun' could take out Trump

    The goal of the call was to have Comey publicly announce that Trump wasn't personally being investigated. Mr Comey had first recorded details of his interactions with the President in a series of memos.
    Stoke to swoop for Hull starlet

    Stoke to swoop for Hull starlet

    Josh Tymon is a product of the Tigers' academy setup and has progressed rapidly to be a regular part in the first-team. However that doesn't mean a move away from the KCOM would be beneficial to him at this stage of his career.

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.