Brent oil rises for 8th day on possible extension to supply cut

by Ben Pena April 22, 2017, 1:50

Reuters reported that Brent crude futures climbed 20 cents to touch $56.43 per barrel, the highest since early March.

Wednesday's Energy Information Administration (EIA) inventories data recorded a draw 2.2 million barrels in the latest week following a 1.6 million build previously and this was a bigger draw than expected which pulled stocks down from record highs.

Traders said that the price rises were a result of reports that Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), had told other producers that it wanted to extend a coordinated production cut beyond the first half of the year.

Benchmark Brent crude futures were down 1 cent at $55.85 a barrel at 0907 GMT.

The U.S. data followed bullish reports from OPEC nations, which said they had cut March output beyond measures they had promised, according to figures the group published in a monthly report, as it sticks to an effort to clear a glut that has weighed on prices.

In November of a year ago, OPEC and other producers, including Russian Federation agreed to cut output by about 1.8 million barrels per day during the first half of 2017 in a bid to reduce a global supply glut and rebalance the market.

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Netflix says the opportunity ahead remains "gigantic" despite a slowdown in subscriber numbers, including global markets. It'll make up some of that in the current period, with a forecast for viewer growth that beat analysts' forecasts.

Global demand for oil is finally close to outstripping supply after almost three years of surplus production, despite growth in the overhang of unused crude, the International Energy Agency said on Thursday.

Based on direct communications with Nigeria, OPEC said the country's production levels were still around 1.269 million barrels per day. But it has kept supplies to Asia steady so far this year as it defends its market share in the world's fastest oil-demand growth region against other producers.

But OPEC revised up its estimate of oil supply growth from producers outside the group this year to 580,000 bpd, as higher oil prices following the supply cut help spur a revival in US shale drilling. Total non-OPEC supply was forecast at 580,000 bpd, OPEC said.

USA crude production is set to grow to 9.9 million bpd in 2018, from 9.22 million bpd this year.

"The weakness in the market is concerning, seeing that US production alone can offset a number of encouraging news", said Michael McCarthy, a chief strategist at CMC Markets.

North Korean state media warned on Tuesday of a nuclear attack on the United States at any sign of American aggression as a U.S. Navy strike group steamed toward the western Pacific.


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