Mettis Global News
Mettis Global News
Mettis Global News
Mettis Global News

Trending :

Oil prices stable amid declining US Crude inventories

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

Oil prices were relatively stable on Thursday after gaining in the previous session as API reported a more than expected drop in US Crude Inventories despite a rise in US Gasoline Inventories.

Prices in international oil markets have been capped by rising US Shale production which is set to break through 10 million barrels per day (bpd) undermining efforts by OPEC members to tighten the markets.

U.S. West Texas Intermediate (WTI) crude futures were at $58.05 a barrel at 0126 GMT, down 3 cents from their last settlement.

Brent crude futures, the international benchmark for oil prices, were at $64.58 a barrel, down 8 cents.

Over the future course of oil, Energy Agencies don’t seem to agree on whether prices will fall or rise in 2018. Some of the analysts believe that the ongoing Bullish trend in prices might be short-lived whereas others hint at a rising oil prices across world during 2018 despite increasing US Shale Production.

With a bearish attitude, International Energy Association only recently published a report that warned of another glut in oil markets in near future. The report based this forecast on following premise, US Shale Production is expected to grow so much as to bring global inventory levels to the same level during 2016. According to IEA Report, rising production would put an end to strong inventory drawdowns that have been seen through the year. The agency predicts that the inventories would rise by 200,000 bpd during the first 6 months of 2018.

In the Bullish Arenas, the OPEC has said that global oil inventories have dropped by 130 million barrels. OPEC Secretary General, Muhammad Barkindo is highly optimistic “to see a return to stable markets” during 2018 quashing any fears of rising US Shale Output. Many analysts have asked for details of OPEC’s exit strategy.

Oil prices have been able to gather the required momentum during 2017 as prices have risen from $ 40 to $ 60 levels. The recent efforts by OPEC, non-OPEC members and Russia have helped market gain some stability.

However, the major threat to the Oil Prices has been from rising US Shale Production which is expected to match Russian and Saudi Output in 2018. With prices stable, and rising US Production the question that analysts keep asking is how the markets would react when OPEC disbands Production Cuts Deal in 2018. 

Posted on: 2017-12-21T12:35:00+05:00