Oil prices fall

Kuwait Times - - BUSINESS -

Oil prices fell yes­ter­day fol­low­ing a re­ported rise in US crude in­ven­to­ries and an es­ti­mate that OPEC may have pro­duced more crude in Novem­ber than pre­vi­ously thought, po­ten­tially un­der­min­ing a planned out­put cut. In­ter­na­tional Brent crude fu­tures were down 58 cents at $55.14 per bar­rel at 1054 GMT. US West Texas In­ter­me­di­ate (WTI) crude oil fu­tures were down 61 cents at $52.37 a bar­rel. Traders said the price falls fol­lowed an in­dus­try re­port of surprise in­creases in US crude in­ven­to­ries.

Data from the Amer­i­can Petroleum In­sti­tute showed US crude in­ven­to­ries rose by 4.7 mil­lion bar­rels in the week to Dec 9, com­pared with an­a­lysts’ ex­pec­ta­tions for a 1.6-mil­lion-bar­rel de­cline. Of­fi­cial in­ven­tory data from the US En­ergy In­for­ma­tion Ad­min­is­tra­tion will be re­leased later. Mar­kets were also fo­cused on an an­tic­i­pated US in­ter­est rate hike that would likely boost the dol­lar, mak­ing dol­lar-traded fuel im­ports more ex­pen­sive for coun­tries us­ing other cur­ren­cies.

Greg McKenna, chief mar­ket strate­gist at for­eign ex­change and fu­tures bro­ker­age Ax­iTrader, said “traders pretty much have a Fed in­crease of 25 ba­sis points locked and loaded”. Oil traders said prices were fur­ther de­pressed by a re­port from the In­ter­na­tional En­ergy Agency (IEA) which said it be­lieves OPEC pumped about 34.2 mil­lion bar­rels per day (bpd) of crude in Novem­ber, more than 500,000 bpd above OPEC’s of­fi­cial es­ti­mate for October.

If true, that would un­der­mine ef­forts by the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries and other pro­duc­ers such as Rus­sia to cut al­most 1.8 mil­lion bpd of pro­duc­tion in an effort to end two years of over­sup­ply and cheap oil. OPEC’s own Novem­ber pro­duc­tion figures will be re­leased later. The IEA said global oil sup­ply rose to a record 98.2 mil­lion bpd in Novem­ber, with OPEC’s pro­duc­tion off­set­ting de­clines else­where.

This stands against ex­pec­ta­tions of 96.95 mil­lion bpd of global oil de­mand for the fourth quar­ter of 2016. De­spite this, the IEA said that due to in­creased de­mand, oil mar­kets could show a short­fall of 600,000 bpd early next year if pro­duc­ers stick to their re­duc­tion plans. Saudi En­ergy Min­is­ter Khalid AlFalih said yes­ter­day it would take some time for the mar­ket to re­cover af­ter the deal be­tween OPEC and ri­val pro­duc­ers to limit sup­plies. “We ex­pect the im­pact ... in terms of fun­da­men­tals to take sev­eral months to be re­flected on the mar­ket,” Falih told re­porters. —Reuters

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