Oil loses momentum on concern over supply that Citi sees easing

Iran says supports extending oil output cuts
Oil Prices: Why will crude oil will remain range bound in the near future?

19 April, 2017

Crude output at major USA shale plays is forecast to climb to 5.2 million barrels a day in May, the highest since 2015, according to the Energy Information Administration's monthly Drilling Productivity report. Prices lost 53 cents to US$52.65 yesterday, the lowest close since April 7.

Crude prices have notched three straight weeks of gains to recover from the slump in March, when prices fell to a four-month low of $47.01 on the back of concerns that a ramp-up in USA oil production would dampen OPEC's efforts to drain the glut in supply.

Brent for June settlement dropped as much as 58 cents, or 1 percent, to $55.31 a barrel on the London-based ICE Futures Europe exchange.

In the prolific Permian play located in West Texas and New Mexico, oil production is forecast to rise by almost 76,000 bpd to 2.36 million bpd, data showed, a new record for the largest USA shale play.

The NNPC said in its latest monthly report that the Federal Government's engagement with the Niger Delta militants had continued to enhance production.

Oil prices dropped below $30 per barrel in early 2016 as USA crude oil production gains added to a market where OPEC was defending a market share with more robust output.

This suggested the extra barrels went into storage amid the expectation of oil price rise. Iran fed hopes that OPEC and non-OPEC producers would extend the cuts, but Saudi Arabia's energy minister said it was too early to discuss an extension.

U.S. West Texas Intermediate crude futures were also down 18 cents at $53.

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USA drillers last week added rigs for a 13th straight week, bringing it to its highest in roughly two years.

Oil prices swelled last week to their highest levels since March 1, AAA said.

Oil producers are showing "very good" compliance with pledged production cuts, Saudi Arabia's Energy Minister Khalid Al-Falih said yesterday in Riyadh.

The southern African country had in November 2015 overtaken Nigeria in output level as it produced 1.722 million bpd, compared to 1.607 million bpd produced by Nigeria, OPEC's December report showed.

The market has been oversupplied for three years, prompting members of the Opec and some non-Opec producers to agree to cut output in the first six months of 2017 to rein in the glut.

A preliminary Reuters poll showed analysts expected data to show us crude stocks fell in the week to April 14, building on a surprise decline the previous week.

The line, operated by Aiteo, is one of two along with the Trans Niger Pipeline that carries Bonny Light crude oil to the export terminal.SPDC has, however, completed the fix work and production is expected to peak in the next monthly report, while exports of roughly 232,000 bpd had been planned for this month.

Crude oil prices dipped in March on signs of lingering supply-side strains in the United States, the world's Number 1 economy.

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