Oil gains positions after decline in U.S. output

By Azernews

By Sara Israfilbayova

Oil futures on June 30 were on track for their biggest weekly gain since mid-May, ending five weeks of losses with prices underpinned by a decline in U.S. output.

Brent crude rose to $47.58, while that of West Texas Intermediate (WTI) rose to $45.10 per barrel, Reuters reported.

Oil production in the U.S. for the week ended June 23, decreased by 1.07 percent, or 100,000 barrels per day, to 9.250 million barrels per day, according to the US Energy Information Administration (EIA).

Oil prices are being supported by the data that oil reserves at the largest U.S. terminal in Cushing dropped by 0.3 million barrels, amounting to 60.8 million barrels. At the same time, gasoline reserves in the country decreased by 0.9 million barrels, or by 0.37 percent - to 241 million barrels. Analysts had expected a smaller decline in the figure - by 0.583 million barrels.

Meanwhile, news from Libya restrains world oil prices. An unnamed source told RIA Novosti that the volume of oil production in the country has almost reached a four-year high of 1 million barrels per day.

The volume of production varies mainly due to technical problems and problems with electricity generation. At the same time, the source noted that production should stabilize "very soon."

OPEC and other major producers made a deal in December 2016 to remove 1.8 million barrels a day from the market. 

OPEC and its allies, trying to reduce a crude glut, agreed in May to extend the supply cut through March 2018. OPEC has exempted Nigeria and Libya from the curbs due to unrest that has sapped those countries' production.