Will Russia's Oil Production Fall in the Coming Months?

Owen Stevens
Апреля 21, 2017

While more OPEC members are seen ready to extend output cuts, U.S. crude stockpiles dropped from a record.

West Texas Intermediate for May delivery fell as much as 55 cents to $52.63 a barrel on the New York Mercantile Exchange, before trading at $52.75 a barrel at 12:43 p.m.in Singapore.

WTI dipped to 11-day lows around $52.20 with choppy trading conditions in NY within a $52.20-52.80 range. The pullback in CVX stock comes amid fresh concerns about the supply-demand balance in the global energy market as inventories swell, US shale producers ramp up output and OPEC members look set to cheat on their production freeze agreement.

U.S. drilling is now set to increase by 123,000 barrels a day in May, according to the U.S. Energy Information Administration, the steepest monthly rise since February 2015. Chief Executive Officer Amin Nasser said the global oil market is moving closer to balance despite the US shale boom.

Cost of the United States light crude oil decreased $0.43 to stand at $52.75, while price of the Brent crude oil fell $0.46 to trade at $55.43. Brent touched $54.61 intraday, its lowest since April 7. Output from the Permian play, the country's largest shale region, was expected to reach a record 2.36 million bpd.

Despite many nations pumping full out and numbers that suggest the supply and demand market is far from balanced, Michael Cohen, head of energy commodities research at Barclays, told Bloomberg television that "we see further upside" in prices "during this quarter".

USA crude prices were down more than 1 percent at US$52.32 a barrel in post-settlement trade after the American Petroleum Institute released its weekly data, indicating that crude stockpiles declined less than analysts had forecast.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017 for six months, extendable for another six months.

Crude oil fell in quiet trading on Monday, after the three-day Easter break, on signs the United States is continuing to add output, undermining OPEC efforts to support prices, and as the market digested North Korea's failed missile launch on Sunday. A Reuters poll showed analysts expected data to show US crude stocks fell in the week to April 14. Off-topic, inappropriate or insulting comments will be removed.

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