Opec chief sees oil producers near to re-balancing market

Opec chief sees oil producers near to re-balancing market

Opec chief sees oil producers near to re-balancing market

The U.S. Energy Information Administration early Wednesday reported that crude supplies fell by a more-than-expected 1 million barrels for the week ended April 14. US WTI crude futures rose 1 cent to $52.66 a barrel.

"The battle between the "sheiks and the shale oil producers" is far from decided. with all attempts by OPEC to achieve a lasting production deficit on the oil market being torpedoed by non-OPEC producers - first and foremost the USA", analysts at Commerzbank wrote.

Oil had rallied above $53 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for prolonging cuts past June, but rising USA output is undermining the effort to trim a global glut. Gasoline inventories rose by 1.5 million barrels, though distillates fell, EIA said.

USA crude futures closed the day down 3.76 percent, trading at $50.44 per barrel and hovering only slightly above the key $50 level, while Brent crude futures dropped almost $2.30 to trade around $52.70 a barrel.

While there is a risk of further "verbal intervention" from OPEC officials - something that has time and time again boosted energy stock and oil prices since a production freeze agreement was first teased in February 2016 - the sector looks vulnerable for further losses.

James Williams, president of energy consultant WTRG Economics in London, Arkansas, said the minister's bullish statement did not lift prices much because of rising USA shale production.

OPEC and non-OPEC producers agreed in December to cut supplies for six months, helping lift oil prices to about 55 dollars a barrel after a two-year slump. The market received a modicum of support from comments on Wednesday by Mohammed Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries, that the group was committed to cutting inventories.

But U.S. stockpiles-and shale production-have cast doubt on whether the production cuts were enough.

Analysts said they expected crude oil inventories to have fallen by around 1.5 million barrels last week.

Traders may be standing still in early trading to wait for official US data on supply and data before pushing the markets in either direction. Still, major disturbances in Chinese oil demand, Russian output, or other aspects of geopolitics can overpower the effects of the bloc's efforts.

In politics, U.S. President Donald Trump ordered a review of whether the lifting of sanctions against Iran was in the United (Shenzhen: 000925.SZ - news) States' national security interests.