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Bloomberg
Oil fell from the biggest gain in three months after U.S. industry data showed the nation’s crude stockpiles increased, adding to concerns about oversupply.
Futures lost as much as 1.5 percent in New York. Inventories rose 2.2 million barrels last week, the American Petroleum Institute was said to report. Government data Wednesday is forecast to show a decline. Middle East production has climbed to a record while U.S. output slumps, a sign that OPEC’s strategy of defending market share is succeeding, the International Energy Agency said in its monthly oil market report.
Oil has traded between $44 and $52 a barrel in the last month after almost doubling from a 12-year low in February amid supply disruptions from Canada to Nigeria and falling U.S. output. The rate of decline in non-OPEC supply will slow next year, the Organization of Petroleum Exporting Countries said in a report.
“It’s bearish for oil if stockpiles gain because seasonally speaking, inventories tend to decline at least until mid-August,†Hong Sung Ki, a commodities analyst at Samsung Futures Inc., said in Seoul. “But of course, we need to see whether this will be a one-time gain or not.â€
West Texas Intermediate crude for August delivery fell as much as 72 cents to $46.08 a barrel on the New York Mercantile Exchange, and was at $46.18 at 9:03 a.m. London time. The grade increased $2.04 to settle at $46.80 on Tuesday, the biggest one-day gain since April 8. Total volume traded was about 5 percent below the 100-day average.
U.S. Supplies
Brent for September settlement slid as much as 1.7 percent to $47.63 a barrel on the London-based ICE Futures Europe exchange. The contract advanced $2.22, or 4.8 percent, to close at $48.47 a barrel on Tuesday. The global benchmark crude traded at an 85-cent premium to WTI for September delivery.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, dropped 166,000 barrels last week, the API said, according to a person familiar with the figures. Nationwide supplies are forecast to decline 3 million barrels in the week ended July 8, according to a Bloomberg survey before Energy Information Administration data Wednesday.
The EIA increased its U.S. crude output forecast for 2017 to 8.2 million barrels a day from 8.19 million projected in June, according to the monthly Short-Term Energy Outlook released Tuesday. Production in 2016 will be 8.61 million barrels a day, up from 8.6 million in last month’s report.
Middle Eastern output exceeded 31 million barrels a day for a third month in June amid near-record supply from Saudi Arabia, while U.S. oil production slid 140,000 barrels a day to 12.45 million, the Paris-based IEA said in its monthly market report released Wednesday.
Venezuela’s oil production fell to 13-yr low in June
Bloomberg
Venezuelan crude production fell to a 13-year low last month as an economic crisis weighed on the OPEC member’s oil industry, the International Energy Agency said.
Output sank to 2.18 million barrels a day, down 240,000 barrels a day from a year earlier and the lowest since February 2003 when an oil workers’ strike trimmed volumes. The drop in production is set to continue, with the IEA forecasting an annual slump of 200,000 barrels a day, double the decline it predicted last month.
“While Iran is clearly OPEC’s biggest source of supply growth this year, Venezuela is notching up the largest decline,†the agency said in its monthly report on Wednesday. Iranian production rose to 3.66 million barrels a day in June, maintaining gains seen since the start of the year when international sanctions were lifted.
Venezuela’s oil production dropped by 120,000 barrels a day from April through June following electricity shortages, according to the IEA. Its predicted decline this year “looks unavoidable†as foreign oil-service providers curb operations and international oil companies face payment delays and “daily operational challenges,†the agency said.
The biggest production losses are at the mature fields of eastern Venezuela. The power shortages that followed a slump in water levels at the Guri dam, as well as the economic crisis, have accelerated natural declines at oil deposits.
The collapse in crude prices over the past two years has eroded state finances in a country that gets 95 percent of export revenues from oil. Venezuela’s crude-oil price currently stands at $39.60 a barrel, 61 percent lower than the $100.64 of June 2014.