Top producer Russian Federation, not an OPEC-member but participating in the deal, is expected to export 61.2 million tonnes of oil in the third quarter (around 5 million bpd), against 60.5 million tonnes in the second quarter, via pipelines, according to industry sources and Reuters calculations.
As such, OPEC said, in its monthly report, “Although oil prices rebounded from five-month lows in (mid-May), following positive U.S. jobs data and assurances by Saudi Arabia that Russian Federation is ready to join OPEC in extending production adjustments to reduce a persistent supply glut”.
This suggests global oversupply will persist for a while.
Oil prices dropped to six-week lows on Thursday, under pressure from high global inventories and doubts about OPEC’s ability to implement agreed production cuts.
Oil held losses below $45 a barrel after sliding to the lowest in seven months as US gasoline supplies unexpectedly rose for a second week. Prices are down 1.6 percent this week.
Futures were little changed in NY, down 3.1 per cent for a fourth weekly decline.
Natural gas futures for July delivery tacked on 0.4 cents to $2.937 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.
Both benchmarks have given up all of the gains made since OPEC agreed to cut output to prop up prices late November.
Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.
“Production growth in Libya and Nigeria and continued rig additions in the USA are complicating the picture, raising doubts on OPEC’s strategy”, AB Bernstein said, reports CNBC.
The news underscored the market’s ongoing struggles with weak gasoline demand in the United States, the world’s top consumer of the motor fuel, and rising production, especially from US shale drillers.
Crude prices drifted barely weaker oi Friday in Asia with investors eager to see if US shale drillers keep pouring on the heat for OPEC and allies or whether recent price falls bring a pause.
On June 14, 2017, the EIA (U.S. Energy Information Administration) released its weekly petroleum status report.
Libyan output will reach 900 000 barrels a day within days, National Oil Co. said on its website, citing Chairman Mustafa Sanalla. New production from OPEC rivals will be more than enough to meet demand growth next year, the International Energy Agency said in its first forecast for 2018.
OPEC now expects US production to increase by 800,000 bpd in 2017.