Oil prices fall on OPEC output increase, rising US crude stocks

Alicia Cross

June 15, 2017

US crude oil inventories fell last week, but an unexpected build in gasoline stocks and weak demand for the motor fuel offset market optimism over the crude drawdown, the Energy Information Administration (EIA) said June 14. BP PLC (BP.LN) (BP.LN) said its latest research report that global crude-oil production in 2016 (http://www.marketwatch.com/story/global-oil-output-in-2016-logged-slowest-growth-in-7-years-2017-06-13) saw its slowest percentage growth in seven years, as output from producers outside of OPEC marked its biggest drop in almost 25 years.

Riyadh is leading an effort by the Organization of the Petroleum Exporting Countries, Russia and other oil producers to cut output by nearly 1.8 million bpd until March 2018 to curb oversupply.

The U.S. Energy Information Administration (EIA) said gasoline inventories increased by 2.1 million barrels during the week ended June 9, while crude inventories decreased by 1.7 million barrels.

Also on Nymex, natural-gas prices were little changed ahead of Thursday's EIA update on supplies of the fuel, after a drop Tuesday to their lowest finish since mid-March.

US stocks were little changed on Wednesday after the Federal Reserve made a widely expected move to raise interest rates for the second time in three months. For crude, that cost in the United States continues to drop, with some USA fields enjoying production costs approaching $15 a barrel.

Crude prices have fall by more than 10 percent since late May, pulled down by a supply glut that persists.

Electricity crisis will lead to 'explosion' in Gaza, Hamas warns
UNRWA spokesperson Chris Gunness told HuffPost in a statement that the organization's mandate and position is clear and unchanged. This mean the already limited amount of electricity received by Gaza homes to a number hours daily, reportedly six.

Eddie Lacy earns second weight incentive bonus from Seattle Seahawks
In March, Bob McGinn of the Milwaukee Journal Sentinel reported that Lacy weighed 267 pounds at one of his free-agent team visits. Lacy's new contract with the Seahawks includes a total of seven weigh-ins in order to keep him at an optimal weight.

Apple Now Allows Users to Tip with In-App Purchases
They have to use Apple's official API, which allows users to provided a rating from 1-5 stars without actually leaving the app. In other words, app developers can no longer put their own review prompts into their apps.

The currency used to express re-balancing is the five-year average level of oil stocks.

Although the IEA said it expected demand to pick up in the second half of this year and to grow further next year, it said it also expects supply to continue to be robust even if Opec and the 11 non-Opec countries supporting its output restraint deal maintain a high level of compliance with the cuts.

The Saudis may well look at that figure and think that they should have supplied that crude to China, but they have not in the name of rebalancing the market.

However, the oil cartel reported that output increased by 336,000bpd last month to 32.14 million bpd. In 2016, the top three crude oil producing countries were Saudi Arabia (10.46 mb/d), Russian Federation (10.29 mb/d) and the United States (8.88 mb/d).

"Crude oil is still struggling to rebound", said Olivier Jakob, strategist at Petromatrix, adding that Opec's gradual approach to rebalancing was giving USA producers time to drill new wells that were undermining the impact of the group's cuts.

Fesharaki, an expert in the energy market and an academic warned that the world may witness a drastic fall in price of a barrel of Oil to $30 if the OPEC failed to cut production.

OPEC members chose to cut production by 1.2 million barrels per day.