by Daniel J. Graeber
Washington (UPI) Jul 11, 2017
A good report on U.S. economic potential and forecasts for dwindling production from American shale helped push oil prices higher in early Wednesday trading.
"The economy appears to have grown at a moderate pace, on average, so far this year," U.S. Federal Reserve Chairwoman Janet Yellen said in prepared remarks. "Although inflation-adjusted gross domestic product is currently estimated to have increased at an annual rate of only 1.5 percent in the first quarter, more-recent indicators suggest that growth rebounded in the second quarter."
The U.S. Commerce Department in its last estimate, published June 29, said first quarter growth in gross domestic product was 1.4 percent, an increase from the previous estimate of 1.2 percent. First quarter growth was still lower than the 2.1 percent recorded during the fourth quarter. The oil and gas extraction sector added less than 1,000 jobs from May and employment in that sector is relatively unchanged from last year.
Crude oil prices, which recovered from a rough start Tuesday to rally for gains, saw continued momentum in early Wednesday trading. The price for Brent crude oil was up 1.6 percent at 9:10 EDT to $48.29 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 1.9 percent to $45.92 per barrel.
Crude oil prices got a life Tuesday following a report from the U.S. Energy Information Administration that said U.S. crude oil production for the year should average 9.3 million barrels per day in 2017 and 9.9 million barrels per day next year. The 2018 forecast was a downward revision and follows a steady string of declines for Brent and WTI, which have struggled to gain ground on $50 per barrel for most of the second quarter.
EIA releases its much-watched inventory report mid-way through morning trading. In its monthly market report for July, the Organization of Petroleum Exporting Countries said market balance, reflected in part by the EIA's report, was pushed back into 2018.
OPEC is struggling to build momentum for a multilateral effort to balance the market through managed production declines. Libya and Nigeria, two members exempt from the agreement so they can steer oil revenue to national security efforts, added nearly a quarter-million barrels per day to the market between May and June.
"OPEC news remains mixed, with Saudi Arabia raising production while reducing exports to meet increased domestic demand," Ole Hanson, the head of commodity strategy at Saxo Bank, told UPI. "Iran is taking aim at 4 million barrels per day, which would be above its production cap."
By his read, the short-term gains for oil will only be significant if WTI breaks through $47 and change. EIA in its report said it expected WTI to average $49 per barrel this year, $2 per barrel less than its previous estimate.
Istanbul (AFP) July 11, 2017
The use of electric cars is set to grow in the coming years, but this will not spell the end of demand for oil, the head of the International Energy Agency (IEA) said on Tuesday. IEA executive director Fatih Birol told Agence France-Presse in an interview that the growth of electric cars was starting from a very small base and oil would still be needed for ships, planes and trucks. Focus ... read more
All About Oil and Gas News at OilGasDaily.com
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2017 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement|