OPEC lowers forecast for Russia’s oil production in 2018

The Energy Information Administration also once again lowered the forecast for USA oil production as shale oil producers have pulled back and are having a tough time overcoming the steep shale oil decline rate.

The reduction could possibly contribute to larger-than-typical inventory draws for September, the EIA said.

Domestic crude production recovered sharply by 6.5% on the week at 9.35mn bpd following the 7.9% decline the previous week as production restarted following hurricane Harvey. A quarter of USA refining capacity to be taken off-line due to the hurricane, sapping demand.

According to a Reuters poll, crude stocks in the country are expected to increase following the impact of Harvey but product stockpiles may decrease.

The EIA also said refinery crude runs fell by 394,000 barrels per day.

In their last report, global demand forecast was revised higher by 0.1 mbpd by both.

After first trying to keep supplies steady to keep its market share despite the oil glut, it has recently tried to cut production as Saudi’s economy faces an uncertain future.

The number of oil rigs in the country hasn’t changed in August and the figure was reported to stand at 61, the same number as in July.

Reports also suggest that Saudi will cut allocations by 0.35 mbpd in October. But if inventories drop below the five-year average soon, those output cuts may not be prolonged.

The IEA report confirmed the same trend highlighted in OPEC’s monthly report out Tuesday.

Oil prices hung onto earlier gains as government data showed US crude stocks rose sharply last week.

Distillate inventories decreased by 3.2 million barrels last week and have moved to the middle of the average range for this time of year.

United States oil inventories are back within the five-year range and are at their lowest since January 2016.

Oil inventories are expected to have increased because of the slowdown in demand caused by disruptions to refineries from August’s Hurricane Harvey.

Industry group the American Petroleum Institute reported Wednesday that USA crude supplies rose 6.2 million barrels for the week ended September 8, while gasoline stockpiles fell by 7.9 million barrels. The 32.76 million barrels a day pumped in August has marked a drop of 79,100 barrels a day from July.