Official figures released Monday showed China’s crude production slipped 6.8% on-year to 3.9 million barrels a day in the first quarter. A Reuters poll showed analysts expected data to show US crude stocks fell in the week to April 14.
The agreement exempted key member Iran from the plan, allowing it to increase its production by 90,000 bpd to reach pre-sanction levels of around 4 million bpd. US crude oil production fell by more than 0.5 million b/d in 2016, but total liquids declined by less than 0.3 million b/d because other liquids production increased by less than 0.3 million b/d.
U.S. West Texas Intermediate (WTI) crude futures were down 51 cents at $52.67 a barrel, after rising 7 cents to $53.18 on Thursday.
Oil prices slipped in Tuesday trading after a monthly drilling report from the U.S. Department of Energy suggested domestic production, already on the rebound from last year’s slump, could grow by another 124,000 barrels per day in May. Analysts and traders surveyed by The Wall Street Journal had predicted that gasoline supplies would drop by 2 million barrels. In London, June Brent crude LCOM7, -0.84% on the ICE exchange also fell 53 cents, or 1%, to $55.36 a barrel. It was the lowest close since March 31. The global benchmark traded at a premium of $2.27 to WTI.
Crude production advanced 17,000 barrels a day to 9.25 million in the week ended April 14, the highest since August 2015. “This, along with the increasing rig count and another increase in the [drilled but uncompleted] well count (up another 111 wells), means that US production supply will continue to move up”, he said.
The Organisation of the Petroleum Exporting Countries (OPEC) is confident that production cuts agreed with non-members to prop up prices will lead to a recovery in the market, its chief said on Wednesday. Stockpiles increased to 264.7 million barrels at the end of February from nearly 262 million barrels in January. He added that as the United States is approaching the summer driving season, “the build in gasoline points to the fact demand isn’t as strong as we expected”. “The reasons are twofold”.
The refinery has capacity to process 120,000 barrels of crude a day, according to data compiled by Bloomberg.
Looking at observed stocks versus the implied gap between demand and supply; new OECD stocks data for February shows that, set against the conventional measure of the five-year average, they remain about 330 million barrels above this level.
Gasoline futures for May delivery dropped 3 percent to $1.659 a gallon, the lowest close since March 28.