Oil prices rise after OPEC monthly report

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Oil prices rise after OPEC monthly report

A Reuters survey estimates that Saudi Arabia's crude oil production fell by 40,000 bpd (barrels per day) to 9.98 MMbpd (million barrels per day) in August 2017-compared to the previous month.

Analysts at Drillinginfo.com said any sustained rally in oil prices would depend on demand strengthening along the lines of the IEA's projections, along with supply cuts.

The kingdom and Kazakhstan said such an extension "would be considered in due course as market fundamentals may dictate", according to a separate Saudi statement. In August, the IEA has anticipated annual growth would hit 1.5 mb/d, again an increase on July's 1.4 mb/d forecast. The IEA sees global oil demand rising this year by the most since 2015, while OPEC boosted projections for consumption in Europe and China.

U.S. West Texas Intermediate and international-benchmark Brent crude oil settled higher on Tuesday.

"Depending on the pace of recovery for the US refining industry post-Harvey, very soon OECD product stocks could fall to, or even below, the five-year level", the IEA's report read.

This is a problem for the countries which need prices to be in the $60-plus range, said Croft, who said the key goal of the agreement between OPEC and non-OPEC members to limit output which is set to expire in March 2018, was to push prices above $60. This comes as all reporting agencies saw an improvement in OPEC compliance, even OPEC themselves. OPEC noted in its closely watched monthly report that production in August plummeted by 79,000 barrels per day to 32.76 million, caused primarily by a cut in Libya, Gabon, Venezuela, and Iraq.

Much of that was because of a near 10 million-barrel increase in stocks in the U.S. Gulf region and as crude production rebounded from a brief Harvey interruption.

Data from the U.S. Energy Information Administration Wednesday showed that domestic crude supplies climbed by 5.9 million barrels for the week ended September 8.

Mexico produced 170,000 barrels per day, while it had to produce 100,000 barrels.

"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly", the IEA said.

OPEC and other producers, including Russian Federation, have agreed to reduce output by about 1.8 million bpd until next March in a bid to reduce global oil inventories and support oil prices. Inventories of gasoline and distillate were expected to fall 4 million barrels and 300,000 barrels, respectively.

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