Ahead of a meeting of OPEC hopes for a shrinking supply of the oil market

Ahead of a meeting of OPEC hopes for a shrinking supply of the oil market



22/7/2017 12:00 am

(
Reuters) - Energy Minister Suhail bin Mohammed al-Mazroui said on Friday he hoped supply starts to shrink in the second half of the year as demand accelerates as oil prices rise ahead of an important meeting of oil-producing major states next Monday.
"We are seeing a strong demand and a stable number of rigs in the United States," Al Mazrouei told reporters. "It is the beginning of the third quarter and demand is accelerating. I hope the deal will have a big impact in the third and fourth quarters."
The price of Brent crude below $ 50 a barrel remains important due to worries about rising supplies from the Organization of the Petroleum Exporting Countries (OPEC), despite its pledge to cut output in an effort to reduce supply to the market.
Oil prices rose ahead of an important meeting of oil-producing main nations next Monday, but Brent remained below the $ 50 a barrel he briefly broke for the first time in six weeks during the previous session.
Opec and a number of non-member producers such as Russia have extended an agreement to cut output by 1.8 million barrels per day until March 2018.
But OPEC's commitment fell to 78 percent in June due to higher output than Algeria, Ecuador, Gabon, Iraq, the United Arab Emirates and Venezuela. Has reduced the impact of strong commitment to Saudi Arabia, Kuwait, Qatar and Angola, the International Energy Agency (IEA) said last week.
"The UAE is committed to its cuts," Mazrouei said. "We have seen some increase in the production of some non-participating countries because of their own situation."
At 0658 GMT, Brent crude futures were up 10 cents, or 0.2 percent, at $ 49.40 a barrel.
US crude futures in the WTI rose 7 cents, or 0.2 percent, to $ 46.99 a barrel.
Both crude stocks hit their highest level since early June in volatile trading in the previous session, led by data showing a sharp decline in US crude and fuel inventories last week.
"The impact of strong inventory declines announced earlier this week is still in the market," ANZ Bank said.
Rick Spooner, chief market analyst at CMC Markets in Sydney, said the inventory decline could continue in the near term but overall inventory levels this year would probably remain higher than in 2016.
US oil inventories of about 490 million barrels remain well above the five-year average, while US production has risen about 12 percent since mid-2016 to 9.4 million bpd.
Oil traders are looking to meet OPEC and non-OPEC producers on Monday to see if it will address the issue of increased production of Nigeria and Libya exempted from cuts.
The OPEC ministerial committee is monitoring the degree of compliance with the supply agreement and will hold a meeting in St. Petersburg, Russia.
OPEC production cuts face
another counterproductive effect:
US production, which has risen about 12 percent since mid-2016, has risen to 9.4 million bpd. The number of US drilling platforms used to increase supplies has increased since last year but the pace has slowed in recent weeks. And non-OPEC producers on Monday to see if it will address the issue of increased production of Nigeria and Libya exempted from cuts. The OPEC ministerial committee is monitoring the degree of compliance with the supply agreement and will hold a meeting in St. Petersburg, Russia. OPEC production cuts face another counterproductive effect: US production, which has risen about 12 percent since mid-2016, has risen to 9.4 million bpd. The number of US drilling platforms used to increase supplies has increased since last year but the pace has slowed in recent weeks. And non-OPEC producers on Monday to see if it will address the issue of increased production of Nigeria and Libya exempted from cuts. The OPEC ministerial committee is monitoring the degree of compliance with the supply agreement and will hold a meeting in St. Petersburg, Russia. OPEC production cuts face another counterproductive effect: US production, which has risen about 12 percent since mid-2016, has risen to 9.4 million bpd. The number of US drilling platforms used to increase supplies has increased since last year but the pace has slowed in recent weeks. OPEC production cuts face another counterproductive effect: US production, which has risen about 12 percent since mid-2016, has risen to 9.4 million bpd. The number of US drilling platforms used to increase supplies has increased since last year but the pace has slowed in recent weeks. OPEC production cuts face another counterproductive effect: US production, which has risen about 12 percent since mid-2016, has risen to 9.4 million bpd. The number of US drilling platforms used to increase supplies has increased since last year but the pace has slowed in recent weeks.

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