Oil prices rise to 2-week high on dip in USA output

by Ben Pena July 4, 2017, 0:14
Oil prices rise to 2-week high on dip in USA output

Libya's oil production has climbed to more than 1 million barrels a day for the first time in four years just as oil prices capped the longest run of gains in six months after US shale explorers paused a record drilling expansion.

USA crude futures recently traded up 54 cents, or 1.17%, at $46.58 a barrel on the New York Mercantile Exchange.

The price of crude has edged up on Monday due to the first fall in United States drilling activity since January. A separate report showed that US oil producers are pumping at 9.25 million barrels per day, which is the highest level of production since August 2015, however, it has declined from a recent peak around 9.35 million barrels per day.

"I think prices will go up again, but let's see the outcome of the meeting", he told journalists.

Another factor, affecting oil prices is concern about the growth of oil production in Libya.

The price of the WTI crude last Thursday appreciated marginally to US$45.10; below expectations thus discounting the OPEC and non-OPEC cuts.

The price of WTI is down $6.29 (12.02 percent) this year, and the average price is $49.95.

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Crude oil booked a small loss today following a seven-day rally as rising production from members of the Organisation of the Petroleum Exporting Countries (Opec) weighs on prices.

Other analysts, however, believe that the trend of rising output may soon abate and the weekly fall in the USA oil-rig count backed that up. The day before the holiday, AAA reports that regular unleaded averages a mere $2.23 per gallon nationwide: The lowest price for early July since 2005.

However, there's no denying that the US still remains awash with excess oil that is derailing bulk of the OPEC-led cuts aimed at rebalancing the market. The contract gained $1.11 to $46.04 on Friday to the highest since June 13.

The research house said compliance among OPEC members to cut 1.2 million bpd of oil from the market is strong so far but pressure is beginning to build up to sustain the discipline up to June 2018. The growing concern is that rising Non-Opec output, led by the U.S. is increasingly offsetting the reduced Opec production.

The analyst stressed the increase has been driven by higher output from Nigeria and Libya, which were exempted from the deal.

Oil prices climbed for a seventh straight session on Friday, thanks to a weaker USA dollar, in their longest bull run since April but were still set for the worst first-half performance since 1998.

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