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Oil flattens as rise in US output weighs

Continued rise in US stocks negates positive chatter from leading Opec members of cut extension

Oil prices were largely flat on Thursday after steep losses the previous session, with rising US production weighing against comments from leading Gulf oil producers that an extension to Opec-led supply cuts was likely.

Brent futures were at $52.93 barrel at 1:45pm GMT, unchanged from their last close. US crude futures were down 9 cents at $50.50 a barrel.

Both benchmarks had traded more than 50 cents higher earlier in the day, but gains eased at the start of US trading hours.

"The U.S. market perhaps doesn't believe in the oil market balance that OPEC would have us believe," said Hans van Cleef, senior energy economist with ABN AMRO.

Opec cut 'extension' talk lifts price

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Opec members Saudi Arabia and Kuwait signalled that an effort by Opec and other producers, including Russia, to cut oil output was likely to be extended beyond June.

But bloated inventories weighed. Despite a drop in US crude stocks last week, an unexpected 1.5-million-barrel build in gasoline stocks drove prices more than 3.5% lower on Wednesday.

US crude oil production rose to 9.25 million barrels per day, official data showed, up almost 10% since mid-2016 .

Patrick Pouyanne, the chief executive of French oil and gas giant Total, said on Thursday prices could fall again by the end of the year due to a rapid increase in US shale production.

"The rebalancing in US crude stocks may have got under way, but concerns about further gasoline builds are rife even as the US summer driving season shifts up a gear," said Stephen Brennock, an analyst with PVM Oil Associates.

"With questions hanging over US gasoline demand, any further product builds will act as a brake on the oil price recovery," he said.

Oil drops on surprise US petrol build

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Global fuel stocks are well above the five-year average, and Saudi Energy Minister Khalid al-Falih was quoted on Thursday as saying inventories remained elevated in part because traders were selling supplies out of tanker storage.

In China, signs emerged that refiners were using record crude imports to produce more fuel such as gasoline and diesel than the country can absorb.

China's March gasoline output rose 2.5% year-on-year to 11.24 million tonnes, the highest level since at least April 2014, China's National Bureau of Statistics said, adding fuel into an Asian market that is already well supplied.