OPEC Oil Production Drops to 10-Month Low

Mar 04, 2018, 03:56
OPEC Oil Production Drops to 10-Month Low

Brent, the global benchmark, rose 54 cents, or 0.85%, to $64.37 a barrel.

However, the oil for delivery in March contracts held steady at Rs 597 per 10 kg in 50 lots.

An unexpected increase in gasoline stockpiles last week has weighed on fuel prices and is pulling oil prices lower.

The (), which measures the greenback against six major currencies, increased for a second day on Wednesday and was slightly higher on Thursday.

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Oil also fell due to a stronger dollar, which makes commodities denominated in the USA currency more expensive for holders of other currencies.

Oil prices fell for a third day on Thursday, dropping towards USD 64 a barrel as rising USA inventories, record output and a stronger dollar outweighed high OPEC compliance with its supply-cutting deal.

In earlier trading, prices fell as a pledge by President Donald Trump on Thursday to impose tariffs on steel and aluminum imports sparked worries of a looming global trade war with several countries such as China.

The Organization of the Petroleum Exporting Countries (OPEC) will hold a dinner on Monday in Houston with USA shale firms, the latest sign of the producer group widening talks about how best to tame a global oil glut.

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A market tilted toward the supply side eventually pushed the price of crude oil below $30 per barrel and members of the Organization of Petroleum Exporting Countries are working to drain the overhang on the global market through coordinated production cuts.

Soaring U.S. production has pressured oil futures at a time when OPEC members and Russian Federation have reduced output in an attempt to support prices.

OPEC officials are expected to meet US shale executives next week in Houston, at the annual CERAWeek conference, presented by IHS Markit. The price difference between oil and fuel has been narrowing - something that can be a bearish signal for oil prices because it could translate into lower demand from refiners, analysts said. "A transition of the deal is needed but not yet visible, with both an over-tightening and an orderly unwinding being potential scenarios", said Norbert Rucker, head of commodity research at Swiss bank Julius Baer. Oil prices dropped more than 4% in February.

OPEC's cut, which began a year ago, has nonetheless helped to boost prices from levels below United States dollars 30 seen in January 2016.

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