Oil prices retreat, but set for fourth week of gains By

Lloyd Doyle
January 13, 2018

Crude oil prices were in volatile territory early Thursday, with the price for Brent crude oil swinging between small gains and losses as the global benchmark tests $70 per barrel.

"In both 2018 and 2019, EIA expects total global crude oil production to be slightly greater than global consumption, with US crude oil production increasing more than any other country", its latest report read.

The American Petroleum Institute (API) reported a staggeringly large draw of 11.19 million barrels of United States crude oil inventories for the week ending January 5.

The U.S. was a net exporter of natural gas for the first time in 2017 on an annual basis, with net exports averaging 0.4 bcf per day, and expected to average 2.3 bcf per day in 2018 and 4.6 bcf in 2019.

In its previous forecast, issued a month ago, the EIA saw production growth of 780,000 b/d in 2018.

Some 800,000 bpd of the projected 1.2 million US increase from December 2017 to December 2019 is expected to come from tight rock formations in the Permian region in Texas and New Mexico, the agency said.

The agency also sharply raised its outlook for USA oil production for the coming year it now sees production averaging 10.3 million b/d, or almost 1 mb/d more than in 2017.

"The major risk factors would be more global in nature, rather than anything specific domestically", EIA acting administrator John Conti said on a conference call.

Oil prices retreat, but set for fourth week of gains By
Oil prices retreat, but set for fourth week of gains By

Saudi Arabia and a number of Persian Gulf producers reduced crude oil production in support of the agreement.

The crude oil glut that many said would never go away is officially gone.

USA crude oil prices closed Wednesday at their highest levels in over three years.

OPEC and non-OPEC participants agreed on November 30, to extend the production cuts through the end of 2018 in an effort to reduce global oil inventories.

Because crude oil prices are expected to be relatively flat through 2019, USA gasoline prices are also expected to remain near current levels.

US demand growth of 150,000 bpd was estimated for 2017, slightly lower than previous expectations. On Jan. 9, the World Bank increased its global economic growth estimates for 2018 to 3.1 percent after growth in 2017 was stronger than expected. The EIA says it will account for two thirds, or 800,000 b/d of the 1.2 mb/d of oil production growth expected between December 2017 to December 2019.

"Inventories ended 2017 9.3 percent above the five-year average, a stark contrast to the 35.6 percent surplus seen at the end of 2016", Oil Futures Editor Geoffrey Craig said in a statement emailed to UPI.

The Energy Information Admin is out with its US inventories report at 10:30 am ET.

Other reports by Iphone Fresh

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