Oil: Middle East supplies steady and US output rises

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Even as Saudi Arabia and Iraq, two major OPEC oil producers, pointed to a cut in supplies in efforts to tighten the market and US shale output rose as part of the country recovering from Hurricanes Harvey and Irma, the oil markets held steady on Tuesday.

There were also fears that Hurricane Maria, the latest hurricane expected to hit the Caribbean, could knock out refineries and disrupt shipping to and from the United States again.

Brent crude futures LCOc1, the international benchmark for oil prices, were at 55.48 US dollar per barrel at 0624 GMT, unchanged from their last close. US West Texas Intermediate (WTI) crude futures CLc1 were at 50 US dollar per barrel, up 9 cents from their last settlement.

Reuters Photo

Iraq’s oil minister, Jabbar al-Luaibi, said on Tuesday that his country’s crude oil production was currently at 4.32 million barrels per day (bpd).Slightly down from the almost 4.5 million bpd output of May and June.

His comments came after data showed Saudi crude exports fell to 6.693 million bpd in July, down from 6.889 million bpd in June.

Saudi Arabia is the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), which together with some non-OPEC producers like Russia, has pledged to hold back around 1.8 million bpd of supplies, both this year and in 2018, in order to preserve market tightness and prop up prices.

Reuters Photo

But with the United States not part of this agreement, analysts said the upside for prices was limited due to the rising US output.

US shale production is set to rise for a tenth month in a row in October, the US government said late on Monday. Output across seven shale plays is forecast to rise by nearly 79,000 bpd to 6.1 million bpd, according to the US Energy Information Administration.

“Technological advancements continue to make inroads in the US shale industry, boosting well-level economics ... 80 percent of the cost base is below 60 US dollar per barrel (and) breakevens have fallen a further 15 percent just in the last year,” Barclays bank said in its September market outlook.

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Source(s): AP ,Reuters