SINGAPORE – Oil prices fell following OPEC’s announcement that its output surged in March.
The Organization of the Petroleum Exporting Countries (OPEC) said that its March production jumped 810,000 barrels per day (bpd), to 30.79 bpd which is equivalent to a third of global supply.
Front-month Brent crude futures were down 15 cents since their last settlement to US$63.83 per barrel at 0047 GMT on Friday. U.S. crude was down 20 cents at US$56.50 a barrel.
Thanks to dipping output from the United States and other rival producers due to oil prices halving since June last year, OPEC said demand for its oil this year would be higher than previously thought.
“The strategy of OPEC to put pressure on the high-cost producers is working, but the individual members seem to have moved off that focus and are instead producing as much as they can,” said Jamie Webster, analyst at IHS in Washington and an OPEC expert.
OPEC’s report may reinforce the perception that major producers are staking out market share ahead of a potential rise in Iranian exports following its framework accord with world powers over its nuclear program.
Friday’s price fall at least temporarily ended a rally that has seen Brent gain over 16 % in value since the beginning of the month, triggered by Middle East conflict and a dip in U.S. oil production. – Reuters
NEW YORK: Crude oil prices jumped to fresh 2015 peaks on Thursday, turning higher on news that a tribal group made up of former Al Qaeda militants took control of a major southern oil terminal in Yemen.
The terminal is one of the major hubs for the Hadramout region exporting an average of 120,000 to 140,000 barrels per day (bpd) of crude from fields in the area.
While a relatively minor oil producer, Yemen’s escalating conflict raises concerns about neighboring top oil exporter Saudi Arabia.
Brent crude for June delivery was up US$1.18 at US$64.50 a barrel at 2:10 p.m. EDT (1810 GMT), rallying from a US$62.00 low and reaching a 2015 peak for front-month Brent of US$64.95.
U.S. May crude rose 64 cents to US$57.03, hitting a 2015 high of US$57.42 after recovering from a US$55.07 intraday low.
Brent’s premium to U.S. crude was back above US$5 a barrel, now comparing June contracts, after the spread narrowed to US$3.34 intraday on Wednesday.
“The report on Al Qaeda forces taking over facilities in Yemen sent prices up,” said Phil Flynn, analyst at Price Futures Group in Chicago.
The dollar’s weakness also provided some lift for dollar-denominated crude oil prices.
Oil prices pulled back earlier on Thursday when OPEC said in its monthly report that its own output surged by 810,000 barrels per day (bpd) in March, even as low prices start to weigh on U.S. production. [OPEC/M]
Crude futures surged on Wednesday, with U.S. crude up nearly 6 %, following government data showing the smallest weekly inventory build since the week ending Jan. 2, suggesting that months of oversupply may be starting to ease.
Wednesday’s bearish data showing the small build in U.S. crude oil stocks followed reports indicating production in the United States, including in shale play powerhouse North Dakota, was beginning to pull back as the price retreat since June weighs on producers.
Talks between OPEC and other major producers triggered speculation about deals to cut production and supported oil prices on Wednesday, though most analysts said an agreement was unlikely.
Reuters technical analyst Wang Tao told Reuters Global Oil Forum that Brent could rise towards US$70 a barrel in the near term, but that a sharp downturn could happen after that.- Reuters