World Oil Prices Down On Opec Concerns About OPEC Supply

World oil prices fell as market participants cautiously made purchases after US crude supplies rose near $ 50 a barrel, with fears of high crude supplies from oil producers joined in OPEC offsetting previous day data showing demand for gasoline US.

As quoted from Reuters on Friday (04/08/2017), Brent oil prices fell 35% per barrel to the level of USD52.01 per barrel. Meanwhile, US oil prices, West Texas Intermediate (WTI) fell 56 cents to USD49, 03 per barrel, US oil prices traded at a session high of USD49, 96 per barrel.

OPEC crude oil exports rose to record highs in July, partly boosted by surging exports from members of the African group, according to a report by Thomson Reuters Oil Research.

US crude remained below $ 50 a barrel, capped by strong domestic supplies. “The market needs signs of continuing improvement in oil inventory figures to really raise prices higher,” said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut.

Strong demand in the United States has supported prices. The US Energy Information Administration reported gasoline demand reached a record 9.84 million barrels per day (bpd) last week and a decline in commercial crude oil inventories by 1.5 million barrels to 481.9 million barrels.

Market participants say that high production by the Organization of Oil Exporting Countries limits price increases. OPEC and other manufacturers including Russia have pledged to limit production by 1.8 million bpd by the end of March 2018 to help support prices and attract inventories.

However, OPEC production reached a 2017 high of 33 million barrels per day in July, up 90,000 bpd from the previous month, a Reuters survey showed this week, led by a further supply recovery from Libya, one of the countries freed from the deal.

“Our view of the oil market is that a major rally is unlikely to occur in 2017. There is no further decline in production or a continuing increase in demand, prices tend to remain low at the USD50 level for the rest of the year,” said National Australia Bank analysts A note.

There are signs that the oil industry has adjusted to the era of low prices and can produce and operate at levels that were previously uneconomical. US investment bank Goldman Sachs said this week the oil industry had managed to adjust oil prices by around USD50 per barrel.