Tuesday, 23 July, 2019

IEA sees oil market oversupplied in 2019 on USA production

Oil Dips: Looks To Reignite Rally on OPEC, Storm Barry and Iran Tensions Oil slips on poor Opec demand forecast
Ginger Lawrence | 13 July, 2019, 06:59

The Gulf of Mexico is home to 17% of USA crude oil output which stands at around 12 million barrels per day (bpd).

Futures edged higher in NY after climbing 4.5% on Wednesday to close above $60 a barrel for the first time since May.

West Texas Intermediate crude for August delivery gained 23 cents, or 0.4%, to $60.66 a barrel on the New York Mercantile Exchange as of 7:23 a.m.in London after rising as much as 40 cents earlier.

Even reports of OPEC's decreased June production and the increased tensions between a British tanker and Iranian guard boats late yesterday failed to lift prices beyond yesterday's spike which saw WTI crude top $60 a barrel for the first time in almost two months. U.S. President Donald Trump vowed Wednesday to impose more sanctions on Iran and accused it of violating the nuclear accord that he withdrew from previous year.

However, oil prices gave up some gains as OPEC forecast on Thursday that world demand for its crude would decline next year as rivals pumped more, pointing to the return of a surplus despite an OPEC-led pact to restrain supplies. The contract closed on the ideal stage since Might 22 on Wednesday.

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Brent for September added 6 cents to US$67.07 a barrel on the ICE Futures Europe Exchange.

Fifteen production platforms and four rigs were evacuated in the north central Gulf of Mexico, according to a USA regulator, as oil firms moved workers to safety ahead of a storm expected to become a hurricane by Friday. "Imports dropped and refinery utilization reached the highest level since the beginning of the year, contributing to the big draw". It climbed 4.4% to $67.01 on Wednesday, the highest close since May 29.

The storm, which could become a hurricane this week, was on a path through the north central Gulf of Mexico. Chevron said Tuesday it began shutting in five of its platforms in the Gulf and will start evacuating all associated personnel.

London-traded, the benchmark for oil outside of the US, slipped by 49 cents, or 0.7%, to $66.52. Royal Dutch Shell Plc and BP trust additionally evacuated workers. Supplies fell by 9.5 million barrels in the week ending July 5, according to the Energy Information Administration. A day after Iran warned Britain would face "consequences" over the seizure of an Iranian oil tanker, three Iranian vessels tried to block passage of a British ship run by BP through the Strait of Hormuz, the British government said. Production last week rose to 12.3 million barrels a day.