Crude oil prices rally on Monday

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Prices of oil were up as data released by Baker Hughes showed the USA oil rig count in the week ended on Sep 22 eased to 744 compared to 749 in the previous week.

"On the basis of the current IEA estimates, the oil market is more or less balanced in the second half of the year", said Commerzbank in a note.

The Opec meeting last week provided a few positive headlines but fell short of any actual announcements. "Further, the milestone of 2017-2018 will be important, when Russian Federation and Saudi Arabia will or will not extend the OPEC agreement", Konstantin Simonov emphasized.

OPEC economists said the Nigerian economy is gaining momentum. There was a discussion about monitoring exports along with production but there was no concrete announcement on that front.

However, some market analysts addressed their concern about growing oil output from the US. "Compliance was at 94% in July". "OPEC and participating Non-OPEC producing countries recorded the highest conformity ever with their voluntary adjustments in production, achieving a level of 116%" in August, OPEC said in a statement.

He emphasised that Nigeria, as one of the older members of OPEC, would continue to work for the good of the Organisation and its member countries, respecting whatever agreements and resolutions collectively made.

The average price of Oman oil (October delivery) has increased $2.76 to touch $50.39 per barrel compared to September delivery, DME said. It adjusts the previous day's US crude prices using the change in the corresponding WTI futures contract from the USA close to the Singapore 4:30 p.m. minute marker.

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"This rally here is much more fundamentally-based than the rallies we saw from March to April and during May", Torbjorn Kjus, chief oil analyst at DNB Bank ASA in Oslo, said by phone.

USA oil rig count is down by 12 so far in Q3 compared to sharp increases in the first half of this year.

Portfolio managers also increased their already large net long position in US gasoline by a further 3 million barrels to 71 million, the highest since April 2014.

The 2018 forecast was also revised lower from 9.91 million bpd to 9.84 million bpd.

Much of this production will be exported as US refiners along the Gulf Coast aren't capable of processing more light crude, having been set up to deal more with heavier and sour grades from offshore Gulf of Mexico platforms and imports from the Middle East. China is on pace to overtake the United States as the world's biggest oil importer this year, taking in more than 8 million barrels a day.

Over 8 months that the agreement is operating, the surplus of global oil reserves decreased by 168 million barrels and now stocks exceed the five-year standard by only 170 million barrels, according to Novak. Rising demand has also helped balance the market. Brent prices have been supported as demand for prompt-loading barrels at North Sea crude market has jumped and supply remains lower due to oilfield maintenance.

This is also the fifth consecutive week that fuel prices have risen.