Oil prices slipped on Thursday as a rally that had pushed up prices by almost 10 percent since early last week lost momentum despite renewed signs of a gradually tightening U.S. market. <\/p>\n
Brent crude was down 25 cents at $52.11 a barrel by 0825 GMT. U.S. light crude was 25 cents lower at $49.34.<\/p>\n
Strong demand in the United States has been supporting prices, while high supplies from OPEC producers were restricting further gains, traders said, pointing to a range-bound market.<\/p>\n
“Both contracts appear to be moving into a range consolidation mode,” said Jeffrey Halley of futures brokerage OANDA.<\/p>\n
U.S. crude has held below $50 despite record gasoline demand of 9.84 million barrels per day (bpd) last week and a fall in commercial crude inventories in the week to July 28 of 1.5 million barrels to 481.9 million barrels, according to the U.S. Energy Information Administration (EIA).<\/p>\n
That’s below levels seen this time last year, indicating a tightening U.S. market.<\/p>\n
Traders say high production by the Organization of the Petroleum Exporting Countries is capping prices.<\/p>\n
OPEC and other producers including Russia have promised to restrict output by 1.8 million bpd until March 2018 to help support prices and draw down inventories.<\/p>\n
But Thomson Reuters Eikon data show crude oil shipments by OPEC and Russia, which excludes pipeline supplies, hit a 2017 high of around 32 million bpd in July, up from around 30.5 million bpd in January.<\/p>\n
Ample supply is likely to keep a cap on prices for some time to come, analysts say.<\/p>\n
“Our view of the oil market is that a major rally is unlikely in 2017,” National Australia Bank analysts said in a note to clients.<\/p>\n
“Absent further production cuts or a sustained uptick in demand, prices are likely to remain in the low to mid $50s for the remainder of the year.” <\/p>\n
There are signs that the oil industry has adapted to an era of low prices and can produce and operate at levels that would previously have been uneconomic. <\/p>\n
“Of the major projects sanctioned by the big five oil companies (ExxonMobil, Royal Dutch Shell, Chevron, BP and Total) over H1 2017, there has been a clear breakeven target price of $40 per barrel or lower at offshore oil projects,” BMI Research said.<\/p>\n
U.S. investment bank Goldman Sachs said this week that the oil industry had successfully adapted to oil prices around $50 per barrel.<\/p>\n","protected":false},"excerpt":{"rendered":"
Oil prices slipped on Thursday as a rally that had pushed up prices by almost 10 percent since early last week lost momentum despite renewed signs of a gradually tightening U.S. market. Brent crude was down 25 cents at $52.11 a barrel by 0825 GMT. U.S. light crude was 25 cents lower at $49.34. Strong demand in the United States has been supporting prices, while high supplies from OPEC producers were restricting further gains, traders said, pointing to a range-bound market. “Both contracts appear to be moving into a range consolidation mode,” said Jeffrey Halley of futures brokerage OANDA. U.S. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-124302","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/124302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=124302"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/124302\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=124302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=124302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=124302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}