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Monday, September 25, 2023

U.S. oil rises for first time in four days

U.S. oil rises for first time in four days© Reuters. FILE PHOTO: An oil pump operating in the Permian Basin near Midland

TOKYO (Reuters) – U.S. oil prices rose on Friday, snapping three days of declines and taking a breather after steep falls this week that wiped out recent gains made on hopes a global oil glut is coming to an end.

U.S. West Texas Intermediate (WTI) crude () was up 25 cents, or 0.4 percent, at $61.24 by 0056 GMT. On Thursday 1.1 percent to touch a two-week low of $60.18.

Global benchmark Brent () was yet to trade, having settled down 1.4 percent on Thursday at $63.83 a barrel, also a two-week low.

WTI is on track for a 3.6 percent drop this week, its first weekly decline in three, having given up much of its gains of recent weeks when sentiment was boosted by a fall in stocks at the Cushing delivery point for WTI.

“Although destocking in Cushing has continued, with stocks there falling below 30 million barrels for the first time since late 2014, the overall increase in U.S. oil stocks has overshadowed the good news,” Fawad Razaqzada, market analyst at Forex.com, said in a note.

Stocks continued to fall at Cushing in Oklahoma, with inventories down by 1.2 million barrels, the 10th consecutive week of declines, the Energy Information Administration said this week. [EIA/S]

Still, total U.S. crude stocks rose last week even as refineries hiked output, increasing by 3 million barrels in the week to Feb. 23, compared with expectations for an increase of 2.1 million barrels.

The Organization of the Petroleum Exporting Countries (OPEC) will hold a dinner on Monday in Houston with U.S. shale firms, two industry sources said, the latest sign of the producer group widening talks about how best to tame a global oil glut.

U.S. crude output slipped in the last month of 2017, but in November hit an all-time high of 10.057 million barrels per day (bpd). Weekly data showed another record and further gains are expected.

Fawad says the market has been ignoring “good compliance with the production cuts by OPEC and non-OPEC countries”.

A Reuters survey on Wednesday found OPEC production fell in February to a 10-month low. [OPEC/O]

Still, “OPEC will not be able to keep its production agreement with other non-OPEC members for too long should the U.S. continue to win more market share,” he said.

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Source: Investing.com

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