TODAY.AZ / Business

Crude prices fall due to production increase in U.S.

04 August 2017 [13:41] - TODAY.AZ

By Azernews

By Sara Israfilbayova

World oil prices declined on August 4, as data revealed on the growth of oil production in the U.S.

U.S. West Texas Intermediate (WTI) crude futures are at $48.95 per barrel, down 0.2 percent, Brent crude futures are at $51.93 a barrel, down 0.15 percent, Reuters reported.

"Developments this week have seen some pessimism return to markets," National Australia Bank said in its August outlook, adding that they forecast Brent to trade at around $53 per barrel in the fourth quarter of 2017.

The U.S. Department of Energy reported that in the week ended on July 28, oil production in the country increased by 0.21 percent, or 20,000 barrels per day, to 9.43 million barrels per day. At the same time, commercial oil reserves fell less than experts expected - by 1.5 million barrels, or by 0.3 percent, to 481.9 million barrels.

The number of drilling rigs in the U.S. increased by eight (two oil and six gas), or by 0.8 percent, to 958 units. In annual terms, the number of drilling rigs increased by 495 pieces, or by 2.1 times.

In the end of 2016, OPEC and non-OPEC producers firstly agreed since 2001 to curtail oil production jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan agreed to reduce oil output by 558,000 barrels per day, including Russia by 300,000 barrels per day, starting from January 1.

The parties decided to extend the production adjustments for nine months, in May 2017.


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