Supply pact helps keep OPEC crude production steady

The world’s most expensive oil

The world’s most expensive oil

At the same time, I don't think they're going to be too upset with Brent at $68.50 per barrel.

WTI light sweet oil was down 35 cents at USD63.47 a barrel, having touched its highest since December 2014. China's crude imports in December fell 9 percent month-on-month to 33.7 million tonnes, or 7.97 million bpd, customs data showed.

Oil prices held near three-year highs on Thursday, supported by a surprise drop in United States production and lower crude inventories, although analysts increasingly warned of signs that fuel markets have overheated. As a result, pipeline capacity constraints should not be a major limiting factor in starting new production, he said. To stabilize the oil market and stop prices from continuing to fall, a change in strategy was needed and many producers cut their production.

The West Texas Intermediate for February delivery increased 0.50 US dollar to settle at 64.30 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery added 0.61 dollar to close at 69.87 dollars a barrel on the London ICE Futures Exchange.

Non-OPEC production, led by the USA and Canadian oil sands projects, “is forecast to continue growing through the end of 2019, ” Conti said, with growth of 2 million bpd of non-OPEC production in 2018 and 1.3 million bpd in 2019.

US demand growth of 150,000 bpd was estimated for 2017, slightly lower than previous expectations. Average WTI crude oil prices are forecast to stay between $4/b and $5/b lower than Brent prices in both 2018 and 2019, falling from the $6/b average price difference seen in the fourth quarter of 2017.

US crude production is forecast to average 10.3 million barrels a day in 2018, a record level. EIA expects global inventories to increase by about 0.2 million b/d in 2018 and by about 0.3 million b/d in 2019.

USA output will be at an all-time high in 2019, surpassing 11 million bpd by the end of that year, a new high for national output, the EIA said in the report. In 2019, crude oil production is forecast to rise to an average of 10.8 million b/d. The EIA anticipates OPEC production to increase by 500,000 b/d in 2019 as it slowly returns to pre-agreement levels.

Only Russia and Saudi Arabia have produced more crude, hitting peak output of over 11 million bpd and about 10.7 million bpd respectively in recent years.

"Inventories ended 2017 9.3 percent above the five-year average, a stark contrast to the 35.6 percent surplus seen at the end of 2016", Oil Futures Editor Geoffrey Craig said in a statement emailed to UPI. "Supply disruptions and falling USA and global inventories have driven crude oil higher", said Ole Hansen, head of commodity strategy at Saxo Bank in a note.

Iranian Oil Minister Bijan Zangeneh said Tuesday that prices this year were supported in part by OPEC commitments, but also by demand strains from severe winter weather.

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