Oil world turned upside down as UAE buys oil from US

According to an online poll conducted by Business Standard, more than 55% people are of the opinion that crude oil prices will float between $60 to $70 per barrel in 2018.

Oil prices were trading lower on Monday as rising USA output, a weaker physical market and recent dollar strength added to the pressure from a widespread decline across equities and commodities markets.

Brent crude futures fell $1.35, or 2 percent, to $65.51 a barrel, closing below its 50-day moving average for the first time in about seven months. Last month, it forecast a 970,000 bpd year-over-year increase to 10.27 million bpd.

U.S. crude inventories rose 1.9 million barrels last week, compared with analysts’ expectations for an increase of 3.2 million barrels, the U.S. Energy Information Administration’s (EIA) data showed on Wednesday.

The agency forecast US crude oil output will rise by 1.26 million bpd to 10.59 million bpd in 2018.

American crude production has now eclipsed Saudi Arabia’s output, and Citigroup Inc. expects it to breach 11 million barrels a day by the end of summer, several months earlier than the US government’s own forecast. The recent rally in crude prices has led to driving increased investment in Oil & Gas Production facilities and Infrastructure, fueling more drilling rigs and oil production, particularly in the shale industry. “Shipments from US ports have increased from a little more than 100,000 barrels a day in 2013 to 1.53 million in November – traveling as far as China and the U.K”. By end of trade on Monday, Brent crude had come down to $67.62 per barrel from $69.65 on February 1.

Crude has dipped 0.6 per cent this week and is on track for its second weekly decline in three.

OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. American production has now eclipsed Saudi Arabia’s, and Citigroup Inc. expects it to breach 11 million barrels a day by the end of summer, earlier than the USA government’s forecast for November. The EIA said this year the US will produce an average of 10.6 million bpd, rising to 11.2 million bpd next year. Higher oil prices also will put a dent in demand. “We always anticipated that U.S. production is going to cross 10 million barrels a day”, he added. “Thus a real pain-trade has not yet hit the oil market”, said Bjarne Schieldrop, head of commodity strategy.