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Crude prices drop amid OPEC data on output growth

11 August 2017 [13:42] - TODAY.AZ

By Azernews

By Sara Israfilbayova

World oil prices declined on August 11, as investors continue to win back data on the growth of production in the OPEC countries.

Brent crude, the global benchmark, is at $51.62 a barrel, down 0.54 percent from its last close. That was the lowest since August 1. U.S. West Texas Intermediate (WTI) crude is down 0.66 percent, at $48.27 per barrel, reaching the lowest since July 26, Reuters reported.

The OPEC report, published on August 10 reads that the countries of the organization increased oil production by 172,600 barrels per day in July, as compared to June - up to 32.869 million barrels per day. The dynamics is explained by the growth of oil production in Libya, Nigeria and Saudi Arabia. Reduction of production was recorded in Iraq, Angola and Venezuela.

Libya and Nigeria at the same time are exempted from obligations, as the oil industry of these countries has suffered greatly from the activities of armed groups.

"Supply-side issues also weighed on prices, with data showing Libyan production in July hit its highest level for the year," ANZ bank said in a note.

Traders also expect data by the American industrial service company Baker Hughes, a GE Company (BHGE) on number of drilling rigs in the U.S. for the week.

Meanwhile, U.S. President Donald Trump stepped up his rhetoric against North Korea again on August 10, saying his earlier threat to unleash "fire and fury" on Pyongyang if it launched an attack may not have been tough enough.

North Korea has said it is considering a missile strike on the U.S. Pacific territory of Guam. The American Andersen airbase and the naval base of Apra Harbor are located on the island of Guam.

"I think the issue that is affecting the market is the general risk sentiment of saber-rattling between Washington and Pyongyang," said Michael McCarthy, chief market strategist at CMC Markets.

On November 30, 2016 OPEC members agreed to remove 1.2m barrels a day from global oil production.

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

OPEC and non-members decided to extend cuts in oil output on May 25, by nine months to March 2018.

Next meeting of the OPEC Technical Committee will be held on August 21 in Vienna.


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