Oil Set for Weekly Drop as Supply Concerns Weigh

Posted by Joseph Keefe
Friday, March 16, 2018
IEA sees 2018 global oil demand increasing by 1.5 mln bpd.
Oil prices were set for a weekly drop despite a slight gain in both benchmarks on Friday, on concerns that rising global supply could undermine efforts by OPEC and other producers to tighten the market.
West Texas Intermediate (WTI) oil futures for April delivery rose 14 cents to $61.33 a barrel by 1145 GMT, after settling up 23 cents on Thursday. WTI was set to fall 1.3 percent this week, reversing the previous week's 1.3 percent gain.
Brent crude futures trading in London climbed 6 cents to $65.18 a barrel, after settling up 23 cents. Brent was down 0.5 percent for the week.
Reports this week refocused investor attention on the potential for rising supply to overwhelm expected gains in crude demand for 2018.
On Thursday, the International Energy Agency (IEA) said global oil supply increased in February by 700,000 barrels per day (bpd) from a year ago to 97.9 million bpd.
The IEA also said supply from producers outside of the Organization of the Petroleum Exporting Countries (OPEC), led by the United States, would grow by 1.8 million bpd this year from an increase of 760,000 bpd last year.
The supply increase is more than the IEA's expected demand growth forecast for this year of 1.5 million bpd.
The agency also said commercial oil inventories in industrialised nations climbed in January for the first time in seven months.
"Part of the stock build is seasonal but some investors did not expect it to happen in an era of production cuts, which suggests the OPEC cuts may not be enough," Olivier Jakob of Petromatrix consultancy in Zug said.
OPEC and other producers began cutting supply in January 2017 to erase a global crude glut that had built up since 2014.
On Wednesday, the U.S. government reported that crude stockpiles there increased by a more-than-expected 5 million barrels, rising for a third straight week.
"Looking forward to next week, the Saudi crown prince (Mohammed bin Salman) will be in Washington with the potential for more strong rhetoric against Iran that could add support and volatility," Jakob of Petromatrix added.
Political risk linked to Tehran increased after Rex Tillerson was sacked as U.S. secretary of state in favour of an Iran and North Korea hawk, and the crown prince said Riyadh would develop nuclear weapons if Iran - its arch-rival - did so.

(Reporting By Julia Payne 

Categories: Contracts Energy Finance Logistics Offshore Energy Shale Oil & Gas Tankers

Related Stories

Eneos Warns on Skyrocketing Costs fo Offshore Wind

Sponsored: Energy and Finance Chiefs Call for Sound Policy, Stable Frameworks at ADIPEC

How Hot Is Your Cable? Understanding Subsea Cable Thermal Performance

Sponsored: UAE Breaks Ground on GW-Scale Renewable Energy Hybrid

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

MDL Secures Cable Laying Job in Asia Pacific

Floating Offshore Wind Test Center Planned for Japan

SPE Offshore Europe 2025 set to drive transformational change for the energy sector

Saipem Marks First Steel Cut for Tangguh UCC Project at Karimun Yard

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Current News

Eni Expands Asian Footprint with Long-Term LNG Contract in Thailand

Finder Energy Buys Petrojarl I FPSO for Timor-Leste Oil and Gas Projects

CNOOC Puts New South China Sea Development Into Production Mode

ADES Nets $63M Contract for Compact Driller Jack-Up off Brunei

Mubadala Energy, PLN Energy Primer Team Up for Andaman Sea Gas Supply

BP Hires Seatrium to Deliver Tiber FPU in Gulf of America

Venture Global, Tokyo Gas Ink 20-Year LNG Supply Deal

Greater Sunrise Moves to Next Phase with Timor-Leste, Woodside Deal

Russia Seeks to Boost Oil Exports to China as Sanctions Tighten

Blackford Dolphin Semi-Sub to Keep Drilling Offshore India

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com