The oil rates rose this Wednesday, lifted because of a minor supply cut by the exporter of crude (Saudi Arabia), though the markets have remained under pressure from the signs that planned OPEC output reduction was actually very badly implemented and the supplies from some other places rose.
Prices for the Brent crude futures, which is the international index for all the oil prices were actually trading at around $53.78 /barrel at 01:30 GMT, an increase of 13 cents from its last close. On the other end, the West Texas Intermediate crude oil future was nearly at $50.96/barrel, which is around 14 cents above its previous settlement.
The traders stated that these price rises were actually the result of Saudi Arabia, which is the world’s biggest oil exporter, stating at least 1 Asian refiner that it will start curbing the crude supplies a little from these contracted volumes in the month of February. In spite of this, there were a lot of doubts that these cuts would be pretty deep enough for re-balancing a market that is suffering from the oversupply for the last many years. Both WTI and Brent futures have gone down by around 6 percent from the beginning of the New Year.
The traders went on to fret about increasing U.S. supply as well as the compliance by the OPEC to those agreed upon production cuts. The U.S. EIA (Energy Information Administration) stated on Tuesday that the American crude production will be rising by around 110,000 barrels/day to 9 million from the years 2016 to 2017.
One more concern for the traders was that the high United States crude stockpiles with its EIA scheduled to be releasing the latest figures this Wednesday. With all the inventories at its highest seasonal level in the past 3 decades, one more increase in the current week’s report can see the prices come under more pressure. ANZ stated that outside the U.S., there were some lingering doubts on the compliance with properly planned production cuts from the associates of the OPEC.
OPEC next major producer Iraq now plans to increase the crude exports from the South port of Basra to a new high in the month of February, placing the shipments very high in spite of the OPEC production cuts taking place this month. The SOMO now plans of exporting nearly 3.641 millions of barrels /day of crude for the month of February as per some reliable trade sources. This means it will beat the record of 3.51 million barrels/ day from the month of December.