IEA less confident on crude rebalancing as OPEC supply rises

IEA less confident on crude rebalancing as OPEC supply rises

As oil price weakens, so does high yield, and vice versa, but as Warren Estey, head of America's natural resources at Deutsche Bank sustained, increased volatility means less room for errors when markets become more efficient, even if the eventual profits can be sky high. The oil price has declined more than 15 percent since the May agreement. According to the latest estimates, compliance declined to 78% for June from 95% in May.

"After the meeting, I will dialogue with other members from Russian Federation and Saudi Arabia to further explain Nigeria's position", Mr. Kachikwu said.

With oil prices lingering below yearly highs, a report Thursday from the International Energy Agency said those are just some of the factors rattling investors' nerves. As oil prices crashed, the external break-even also came down, to $55 in 2016, driven by a "brutal fall in imports", according to the paper.

In its own monthly report on oil markets, OPEC on Wednesday said that the cartel's production rose by almost 400,000 barrels a day in June.

One positive for oil prices could be a rebound in global demand growth, which the IEA estimated at 1.5 million barrels per day in the second quarter of 2017 from 1 million in the first. The IEA expects USA crude production to grow by 780,000 barrels per day next year.

West Texas Intermediate (WTI) crude futures were at $45.37 per barrel, down 12 cents, or 0.3 percent.

More news: Russia has asked US about Syria no-fly zone proposal: Lavrov

Supply issues will tend to remain the dominant short-term focus with more positive rhetoric from OPEC needed to revive confidence, although choppy trading conditions are liable to continue. Technically, the deal now permits Libya and Nigeria to continue with unfettered production for the rest of 2017 and into the first quarter of 2018, but there are some indications that OPEC may pressure these two countries to cut production sooner.

"While the industry has adapted to lower oil prices, through increased efficiency and cost deflation, OPEC budget needs have been sticky, making it hard for them to lower their fiscal break-evens", the analysts write.

Nigeria's benchmark level to join the OPEC cuts is production of 1.8 million barrels of crude a day.

Member states Libya and Nigeria are not participating in the deal so they can steer oil revenue toward national security efforts.

The production rise was expected because Saudi Arabia usually raises output crude this time of year to meet summer electricity demand.

On Wednesday, July 12, 2017, the EIA (U.S. Energy Information Administration) released its weekly petroleum status report. Production from those two countries, in particular, has surged in recent months, undermining the attempted cutbacks and helping to derail widespread predictions of a rally. However, lasting price movements could be limited over the next year because some USA tight oil producers have used financial instruments to guarantee a price above $50/b for their expected production.

Related Articles

  • Kermit the Frog's Puppeteer Leaves the Muppets

    Kermit the Frog's Puppeteer Leaves the Muppets

    News agencies tried to reach out to Disney, which owns Muppets Studio, but no statement has been released regarding the move. He'd also portrayed several "Fraggle Rock" characters and appeared in Henson movies " Labyrinth " and " The Dark Crystal ".
    Microsoft's new plan to bring broadband to everyone in the US

    Microsoft's new plan to bring broadband to everyone in the US

    But the company did not say how much the Rural Airband Initiative would cost or how much upfront money it would be contributing. Microsoft estimates that 5 million households with school-age children don't have access to the Internet in rural America.
    Wanda Group Inks $9.29B Sale Of Tourism Projects, Hotels

    Wanda Group Inks $9.29B Sale Of Tourism Projects, Hotels

    Sunac China is a major residential developer based in the northern city of Tianjin. Sunac has become an increasingly visible dealmaker.
  • 54 buildings retaken from Maute in Philippines Marawi

    54 buildings retaken from Maute in Philippines Marawi

    Padilla said the government is ready to start the early stage of rehabilitation of the besieged city. They also have over 600 buildings to clear.
    KFC Announces Huawei-Made Phone To Mark 30 Years in China

    KFC Announces Huawei-Made Phone To Mark 30 Years in China

    The KFC smartphone is the red model of the Enjoy 7 with the Colonel's face and the year it entered China engraved on it. The phone is equipped with a 5-inch LCD display panel with a resolution of 1,280 by 720 pixels.
    Blac Chyna Breaks Silence On Rob Kardashian's Revenge Porn

    Blac Chyna Breaks Silence On Rob Kardashian's Revenge Porn

    And this is a person that I trusted. "Maybe if I send this video to him, he'll leave me alone", she said of her thought process. INSIDER has contacted Chyna's attorneys Lisa Bloom and Walter Mosley for further comment.
  • Sessions announces

    Sessions announces "largest health care fraud takedown" in U.S. history

    Also in California, four people were charged in a drug-diversion scheme and a health-care fraud scheme involving kickbacks. Abuse of the expensive painkillers often lead addicts to cheaper and often-lethal alternatives: heroin and fentanyl.
    Lalu Yadav's daughter Misa Bharti's Delhi home raided in corruption case

    Lalu Yadav's daughter Misa Bharti's Delhi home raided in corruption case

    But now, even a day after CBI raided the deputy chief minister after registering a case against him, he is silent on the issue. In speaking exclusively to India Today after the CBI raids conducted, Lalu Prasad Yadav said that he has done nothing wrong.
    Celtics trade Avery Bradley to Pistons

    Celtics trade Avery Bradley to Pistons

    Bradley , 26, averaged a career-high 16.3 points, 6.1 rebounds and 2.2 assists in 55 games for Boston last season. The Boston Celtics are acquiring star wing Gordon Hayward , but it still comes at a price due to the salary cap.
  • Hyperloop One reveals full-size prototype of its shiny new pod design

    Hyperloop One reveals full-size prototype of its shiny new pod design

    He claimed the hyperloop will one day become the cleanest, fastest, and safest form of transportation in the world. The company is now entering the next phase of testing with the goal of reaching 250 miles per hour .

    Secretary of State Tillerson Visits Ukraine

    The Secretary appointed a special representative for Ukraine last week, in an effort to further involve the U.S.in the region. Under the Obama administration, the US had taken a hands-off approach to Minsk, allowing the Europeans to take the lead.
    Economy Generated 222000 Jobs in June

    Economy Generated 222000 Jobs in June

    The employment-population ratio (60.1 percent) was also little changed in June and has held fairly steady thus far this year. The increase of 222,000 jobs is a positive signal, but investors are keeping a close eye on wages, Pappalardo added.