Oil Prices Fall As Saudis See Likely Supply Boost

Latin America Energy, Oil and Gas, News and Information

Crude oil prices fell Wednesday after the Energy Information Adminstration reported a massive increase in crude oil stockpiles.

Brent crude futures were down 75 cents at $78.82 a barrel by 0940 GMT, while US crude CLc1 fell 46 cents to $71.74 a barrel.

Brent futures fell 37 cents, or almost 0.5 percent, to $79.20 a barrel by 0636 GMT, after climbing 35 cents on Tuesday.

Rising supply in the USA, where shale production is forecast to hit a record high in June, has limited the upward move in prices.

"OPEC and Russian Federation may consider easing their production cuts before, or no later than, their joint meeting", Ole Hansen, head of commodity strategy at Saxo Bank A/S, said in a note to clients. In post-settlement trade, the benchmark hit a fresh 3-1/2 year high at 72.59.

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Brent pushed past $80 a barrel last week for the first time since 2014, and the market may again try to clear that hurdle, said Gene McGillian, vice president of research at Tradition Energy in Stamford, Connecticut.

WTI is shedding further ground today after the EIA reported on Wednesday that United States crude oil supplies unexpectedly rose by nearly 5.8 mbpd during the week ended on May 18, while USA oil production stayed at all-time highs beyond 10.70 mbpd.

The US has also played a key role in helping to keep oil prices below US$80 this week.

The Ministers, along with their counterpart from the UAE, discussed an output increase of about 1 million barrels per day (bpd), sources told Reuters.

He declared, "It's time for this president to stand up to OPEC; he's palling around with Saudi Arabia and the United Arab Emirates and all these other oil-rich countries.[Trump] should buck his oil industry buddies". Meanwhile Pierre Andurand, one of the most prominent hedge fund managers in the oil market, recently said that $300 a barrel was "not impossible".

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"Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore, said that prices were getting some support from talk that Sinopec, Asia's largest refiner, would increase USA crude oil imports to a record high".

Then late Tuesday the oil-producing cartel known as OPEC suggested it may soon turn on the spigots a little, after curbing its supply for the better part of the past year to boost prices.

The Trump decision to renew US sanctions on Iran could cut as much as half a million barrels a day from Iranian oil exports.

"Whether it's a million barrels more or less, we think we'll have to wait until June before making that announcement", he said.

More news: Planned Iran sanctions, tight supply send oil to new multi-year high

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