Crude oil prices bounce back after supply-side jitters


Oil prices declined Tuesday, under pressure from a rising dollar, falling stocks and an expected increase in crude stockpiles. Global benchmark Brent was up 9 cents, or 0.1 per cent, at $63.92, having settled down 1.4 per cent on Thursday, also a two-week low, and is set for a weekly fall of about 5 per cent.

The price of oil will be influenced by inventory data from the U.S. Energy Information Administration, which is due out about an hour after the market opens. "We see more downside for oil".

The rise in USA output in recent weeks has been overshadowing supply curbs by other producers, led by the Organization of the Petroleum Exporting Countries and Russian Federation.

USA light crude CLc1 is forecast to average $58.88 a barrel in 2018, up from $58.11 in the January poll. Its industry is suffering from a lack of investment and looming US sanctions, sending output past year to the lowest since the 1980s.

USA crude output reached a record in November, although it slipped in the last month of 2017.

Wednesday's weekly data showed a larger-than-expected increase in US crude oil inventories.

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USA oil production C-OUT-T-EIA could surpass 11 million barrels per day this year, with production already near a record above 10 million bpd.

OPEC officials will meet US shale executives at a USA energy conference on Monday, a gathering that underlines the influence of American output in keeping a lid on global prices.

As of 1130 GMT, the Dollar Index was down 0.34, standing at 89.91. "A transition of the deal is needed but not yet visible, with both an over-tightening and an orderly unwinding being potential scenarios", said Norbert Rucker, head of commodity research at Swiss bank Julius Baer. West Texas Intermediate, the US benchmark for the price of oil, was up 0.37 percent to $63.24 per barrel.

Fawad said the market has been ignoring "good compliance with the production cuts by OPEC and non-OPEC countries".

The OPEC/non-OPEC cuts totaling roughly 1.8 MMBPD, which began in January 2017, have helped raise prices from lows around $26/Bbl in January 2016. The group's oil output fell in February to a 10-month low as the United Arab Emirates joined other Gulf members in over-delivering on the reduction pact, a Reuters survey found on Wednesday.