OPEC Energy Production Fell In August, Oil Stuck At $50?

Posted September 14, 2017

OPEC has cut almost one million barrels a day of oil output in the past year.

"Over the next two to three weeks, the EIA inventory numbers will be rather sloppy because you have production disrupted, refineries going offline and online", he said.

Oil prices dropped on Monday on concerns that Hurricane Irma's pounding of heavily populated areas of Florida could dent oil demand in the world's top oil-consuming nation. In August, the IEA has anticipated annual growth would hit 1.5 mb/d, again an increase on July's 1.4 mb/d forecast.

For this year, the IEA sees the need for OPEC crude at 32.7 million bpd, in line with the current production.

US West Texas Intermediate (WTI) was up 33 cents or 0.7 percent to $48.40 a barrel. The EIA expects net petroleum product exports to average 1.1 MMbbl/d in September, down from an average of 2.9 MMbb/d in the first eight months of 2017.

Oil prices remain near $50/bbl despite nine months of output cuts by a coalition of oil producers led by OPEC and Russian Federation.

Thus, Kazakhstan exceeded the plan nearly 3-fold, cutting production in August by 54,000 barrels per day with a quota of 20,000.

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Libya's production fell by about 112,000 bpd to a total of 890,000 bpd last month, however.

OPEC's crude oil exports fell by 920,000 bpd to 25.19 MMbpd in August 2017-compared to the previous month.

Mexico produced 170,000 barrels per day, while it had to produce 100,000 barrels.

In the midst of unstable refinery operations due to Harvey, nationwide gasoline stockpiles slid by 8.43 million to 218.3 MMbbl last week, the lowest level since December 2015, a report Wednesday from the Energy Information Administration showed.

"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly", the IEA said. After the markets closed on Tuesday, the American Petroleum Institute reported that United States oil inventories rose by almost 6.2 million barrels in the week ended September 8.

Oil inventories are expected to have increased because of the slowdown in demand caused by disruptions to refineries from August's Hurricane Harvey.

Markets were upended in late August when Hurricane Harvey struck the southern coast of Texas, sidelined a good portion of total US refining capacity and threatened production centers in the Gulf of Mexico and inland shale basins.