Nigeria's crude oil production increases by 273600 bpd

Marco Green
May 20, 2017

Its meeting precedes the gathering of Opec and non-Opec oil ministers on May 25 to decide whether to extend beyond June 30 their deal to reduce output.

The U.S. benchmark WTI grade added 1.1%, or 54 cents to trade at $49.20 near midday.

Algerian Energy Minister Noureddine Boutarfa said Thursday that most OPEC members support Saudi Arabia and Russia's proposal to prolong the curbs to March next year, and that the rate of compliance should increase.

OPEC and the other producers are likely to cut oil production even more than the current 1.8 million barrels a day, according to Ed Morse, global head of commodities research at Citigroup.

However, the 1.8-million barrel per day cut has not solved its dual objective of higher oil prices and lower inventories. Prices have slipped since reaching a 19-month closing high in February on speculation USA supply will undercut their efforts.

Overall, crude imports from Saudi Arabia rose the highest at 42 per cent to 1.38 million b/d from 970,000 b/d.

The Energy Information Administration said USA crude stocks declined for the sixth straight week.

The Organization of the Petroleum Exporting Countries, Russia and other producers originally agreed to cut production by 1.8 million barrels per day for six months from January 1 to support the market. United States crude inventories fell by 1,8-million barrels for the week to May 12, less than the of 2,4-million barrels that had been forecast.

Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said hedge funds expected the crude glut to recede.

"For the global crude markets, fundamental demand strength in the coming weeks may have to come from seasonal gains in refining runs in Europe and Asia, led by China - provided that product demand and refining margins remain healthy". Its crude exports rose 275,000 bpd in March from February and its stockpiles increased, official data showed on Thursday.

Thomas Finlon, director of Energy Analytics Group LLC, added, "There's room for guarded optimism: OPEC appears to be close to an agreement to roll over the cuts, and US inventories are finally starting to decline".

"The big shift - and what I think OPEC is trying to generate - is a shift in the curve to backwardation, where spot prices sit above forward prices", Currie told CNBC's "Power Lunch" on Wednesday.

Other reports by Click Lancashire

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