Oman Minister of Oil & Gas Mohammed Al Rumhy sees oil prices holding around $65-70/bbl for the next few weeks as the region reduces output by 45K b/d, while Russian Energy Minister Alexander Novak warns that ' the market hasn't rebalanced in full ' as Lukoil CEO Vagit Alekperov favors crude stabilizing around $70/bbl. "Another variable to watch will be USA crude oil production". Although more infrastructure to export crude oil has been recently built, U.S. exporters must still use smaller, less-economic vessels or complex shipping arrangements, which add to costs. The Saudi state oil company is expected to debut this year. This price difference is expected to narrow from the $6/b average price difference seen in the fourth quarter of 2017 because current constraints on the capacity to transport crude oil from the Cushing, Oklahoma storage hub (the geographic location associated with the WTI price) to the U.S. Gulf Coast are expected to gradually lessen. "It's not completely unexpected, given the price momentum".
The American Petroleum Institute (API) reported a staggeringly large draw of 11.19 million barrels of US crude oil inventories for the week ending January 5, marking six large draws. Global consumption of petroleum grew in 2017, and a strong economic backdrop should continue to drive consumption. The EIA expects global inventories to increase by about 0.2 million barrels a day in 2018 and by about 0.3 million barrels a day in 2019.
"The only relief in the foreseeable future could be if USA production picks up even more than its current level". Analysts warned the market is not paying enough attention to USA production increases.More news: Chinese state destroys Christian megachurch as religious crackdown continues
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Last week, the API reported a large draw of 4.992 million barrels of crude oil, along with an increase in gasoline inventories of 1.87 million barrels. Regional summer price spikes can not be precisely predicted.The agency expects gasoline demand in 2018 to total about 9.3 million barrels a day this year, a level that would surpass all-time records set last year. The U.S. Energy Information Administration this week said it expects Brent to average $60 per barrel for the year, up from the $54 per barrel average for 2017. In both 2018 and 2019, EIA expects total global production to be slightly greater than global consumption, with US production increasing faster than production in any other country, contributing to modestinventory builds. Non-OECD consumption growth is expected to account for 1.2 million barrels a day in 2018.
The forecast had no impact on the oil market on Tuesday. China's overall trade surplus for 2017 was $422.5 billion, a decline from 2016.
According to trade press reporting and tanker tracking data, importing diluent for blending with its heavy oil is becoming increasingly hard for Venezuela.