TODAY.AZ / Business

Crude prices fall due to rise of U.S. crude stocks

14 June 2017 [12:55] - TODAY.AZ

By Azernews

By Sara Israfilbayova

Oil prices decreased on June 14 after data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite its pledge to decrease output.

Brent crude futures for August settlement fell by 0.86 percent to $48.30 per barrel, meanwhile U.S. West Texas Intermediate (WTI) crude futures for July delivery dropped by 1.01 percent to $45.99 per barrel.

Inventories, according to Reuters, rose by 2.75 million barrels in the week to June 9 to 511.4 million, compared with expectations for a decrease of 2.7 million barrels.

OPEC's own compliance with the cuts has been questioned, and the producer group said in a report this week that its output rose by 336,000 barrels per day in May to 32.14 million barrels per day.

ANZ bank [The Australia and New Zealand Banking Group Limited] said in a note to clients that prices were "under pressure earlier in the day after a report from OPEC showed that its production had increased."

Adding to the supply surplus is rising U.S. production from shale drillers that has pushed U.S. output up by 10 percent over the last year to 9.3 million bpd, not far below levels by top exporter Saudi Arabia, Reuters reported.

Crude prices have fall by more than 10 percent since late May, pulled down by a supply glut that persists.

World’s oil production giants came together in December 2016 to put an end to the global glut. 

OPEC members decided to cut production by 1.2 million barrels per day. Some non-OPEC countries, such as Russia, Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan promised to cut output by 600,000 barrels per day, beginning from January 1, 2017.

OPEC and non-OPEC countries decided to extend oil output cuts for nine months in Vienna on May 25.


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