Crude prices continue to decline

By Azernews

By Sara Israfilbayova

World oil prices continued to fall on August 30, while the market reacts poorly to the data of the American Petroleum Institute (API) on the reduction of stocks in the U.S.

International Brent crude futures closed up 0.2 percent to $52.00 a barrel, U.S. West Texas Intermediate (WTI) crude edged down 0.3 percent to $46.44 a barrel, Reuters reported.

The largest refinery in the U.S., Motiva Enterprises (Port Arthur), owned by the national oil company of Saudi Arabia, currently operates at only 40 percent of its capacity (refining at 100 percent capacity is 605,000 barrels per day).

Like the rest of the region, Motiva has been the victim of torrential rains and floods caused by the tropical storm of Harvey. At the moment, more than 4 million barrels per day (more than a dozen refineries in Texas) of processing capacity are in the autonomous mode.

Some companies in Texas have already begun preparations for restarting production, but this process can take at least a week.

More than 18 percent of oil production in the Gulf of Mexico was shut down, the U.S. Department of the Interior’s Bureau of Safety Environmental Enforcement said. Still, tropical Storm Harvey, which was downgraded from a hurricane, hit refiners harder.

Meanwhile, the API data on the decline in the reserves of "black gold" in the U.S. have little effect on the cost of oil. The API reported that oil reserves in the country for the week ended on August 25, decreased by 5.78 million barrels, to 457.42 million barrels.

Oil reserves at the country's largest terminal in Cushing have grown by 582,000 barrels. Gasoline stocks increased by 476,000 barrels, while distillates - decreased by 486,000 barrels.

On November 30, 2016, the OPEC summit was held in Vienna, where OPEC members reached an agreement on reducing oil production by 1.2 million barrels per day. On December 10, 2016 was a meeting of oil producers outside the OPEC. Following the meeting, was signed an agreement to reduce oil production by a total of 558,000 barrels per day starting from January 2017.

The deal participants agreed to extend the production adjustments for nine months, on May 25, 2017.

The next meeting of the Joint OPEC-Non-OPEC Technical Committee (JTC) o OPEC is scheduled for September 22 in Vienna.