Oil prices lower after strong third quarter

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Oil prices fell on Monday, pausing for breath after posting gains of as much as 20 percent in the third quarter after a survey pointed to a slight increase in OPEC production in September.

US crude was down 14 cents, or 0.3 percent, at 51.53 US dollars per barrel. The US benchmark on Friday posted its strongest quarterly gain since the second quarter of 2016 and the longest streak of weekly gains since January.

Global benchmark Brent crude for December delivery was down 23 cents, or 0.4 percent, at 56.56 US dollars per barrel. On Friday, Brent for November delivery closed 13 cents higher, notching up a third-quarter gain of around 20 percent, the biggest gain in five quarters. It was the biggest third-quarter increase since 2004.

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The contract reached its highest in more than two years early last week and posted its fifth consecutive weekly gain. It was Brent’s longest weekly bull run since June 2016.

The price gains have been supported by anticipated demand from US refiners resuming operations after shutdowns due to Hurricane Harvey, but a quick resumption of shale production could put a dampener on prices.

“US production should be soft over August and September, due to Hurricane-related shut-ins but should rebound” in the fourth quarter, Barclays Research said in a note.

Oil output from the Organization of Petroleum Exporting Countries (OPEC) also rose last month, gaining by 50,000 barrels per day (bpd), a Reuters survey found.

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Iraqi exports increased and production edged higher in Libya, one of the OPEC producers exempt from a deal to curb output and support prices.

Middle Eastern oil producers are concerned the recent price rise will only stir US shale producers into more drilling and push prices lower again.

US energy companies added oil rigs for the first week in seven after a 14-month drilling recovery stalled in August, energy services firm Baker Hughes said on Friday.

Drillers added six oil rigs in the week to September 29, bringing the total count up to 750.

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Source(s): AFP ,Reuters