Crude oil little changed amid rising United States output, OPEC production cuts

On the flipside however, OPEC, via its monthly oil market report released on Wednesday evening, said Nigeria was still producing at an average 1.545 million barrels per day, according to secondary sources.

USA crude oil production C-OUT-T-EIA has risen by 9 percent since mid-2016 to 9.2 million bpd, resulting in a surge in commercial inventories to a record 535.5 million barrels C-STK-T-EIA.

U.S. crude inventories have touched record highs at the U.S. storage hub of Cushing, Oklahoma, and in the U.S. Gulf Coast in recent weeks, according to U.S. government data.

"Indeed, although the oil market will likely tighten throughout the year, overall non-OPEC production, not just in the USA, will soon be on the rise again".

US crude was down 9 cents to $53.31 a barrel as of 11:21 a.m. ET (1521 GMT), while Brent crude dropped 17 cents to $56.06 a barrel.

However, OPEC also raised its forecast for supplies from non-member countries in 2017 as higher prices encourage USA shale drillers to pump more, reducing demand for OPEC's oil this year.

OPEC and other producers, including Russian Federation, agreed late in November to curb output by around 1.8 million barrels per day in the first half of 2017 to rein in oversupply.




The compliance level among most member countries has been high. The Opec is scheduled to gather in Vienna on May 25 to discuss whether to roll over for another six months the 1.2 million barrels a day in production cuts it implemented in January.

Saudi Arabia, de-facto leader of oil cartel Opec, has told other producers that it wants to extend a co-ordinated production cut beyond the first half of the year, the Wall Street Journal reported.

The OPEC agreement was supported by 11 non-OPEC states, which joined the deal by promising to reduce oil output by 558,000 barrels per day. "Or maybe the sluggish stock market performance put a lid on yesterday's price strength but we should not be surprised to see the oil market make amends today". If confirmed by U.S. Energy Information Administration figures on Wednesday, oil could get another boost.

For 2017, the IEA said it expects non-OPEC supply to rise by 485,000 bpd, above its previous estimate of 400,000 bpd, led by increases in USA production growth.

OPEC producers took another 153,000 barrels a day off the market in March as part of its bid to drain the world's oil glut. Shipments were 888,000 barrels a day, the smallest since December.

Market watchers have long maintained that producers need to extend their production cut if they hope to make a dent in the global inventories.

(Copyright © 2015. All Rights Reserved.)
 
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