Oil drops after Saudi raises production

Bloomberg

Oil declined after Saudi Arabia told OPEC it raised production back above 10 million barrels a day in February, reversing about a third of the cuts it made the previous month.
Futures tumbled 1.5 percent in New York, reversing earlier gains. The kingdom, which had curbed supplies more than it needed in January as part of a deal to help re-balance world markets and reduce a global glut, told OPEC it boosted production by 263,300 barrels a day last month, a figure that jarred with the group’s own estimate that Saudi output fell further. Russia, Iraq are yet to deliver the cuts they promised.
Oil broke below $50 a barrel last week for the first time since December as rising
US inventories and output counteracted reductions as part of a deal by members of the Organization of Petroleum Exporting Countries and 11 other nations that started
January 1. The Saudi production increase comes as Energy
Minister Khalid Al-Falih previously said the kingdom won’t indefinitely “bear the burden of free riders.”
West Texas Intermediate for April delivery slipped by 73 cents to $47.67 a barrel at 9:38 a.m. on the New York Mercantile Exchange. Total volume traded was about 43 percent above the 100-day average.
Brent for May settlement declined by 61 cents to $50.74 a barrel on the London-based ICE Futures Europe exchange, slipping below its 200-day moving average for the first time since November. The global benchmark traded at a premium of $2.52 to May WTI.
At 10.011 million barrels a day, Saudi production is still below the ceiling of 10.058 million a day imposed by the agreement, according to OPEC report.
Yet, production data that the group derives from external sources, such as news agencies, showed Saudi output falling by 68,100 barrels a day to 9.797 million a day. The cartel as a whole got closer to full implementation of the cuts, with output falling in February by 139,500 barrels a day to 31.958 million a day.
The Energy Information Administration forecast that output at major US shale plays would reach 4.96 million barrels a day in April, the highest since March 2016, according to a report. US crude stockpiles probably increased by 3 million barrels last week, according to a Bloomberg survey before data from the EIA on Wednesday. The industry-funded American Petroleum Institute will release its inventory data later on Tuesday.