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Most oil players losing confidence in the market, IEA says
by Daniel J. Graeber
Washington (UPI) Jul 13, 2017

Slow gains for oil prices in early Friday trading
Washington (UPI) Jul 14, 2017 - Crude oil prices moved between short gains and losses in early Friday trading as OPEC production figures balanced against emerging problems for U.S. shale.

Crude oil prices have been volatile this week, with several sessions seeing early-day declines erased by the end of U.S. trading. Reports from the U.S. Energy Information Administration, the Organization of Petroleum Exporting Countries and the International Energy Agency all offered fodder to drive oscillating oil prices this week.

Libya and Nigeria are adding more oil to the market in part because they're exempt from a multilateral deal to curb output as part of an OPEC-led balancing effort. In its report this week, the IEA said each month has brought with it more concerns about the effectiveness of the effort, adding confidence was waning for oil investors.

Strong demand, this week from China, has offered some support for crude oil prices. The price for Brent crude oil is up more than 3 percent for the week.

An emailed market report from London oil broker PVM said total global oil supply increased by about three quarters of a million barrels last month. Phil Flynn, a senior market analyst for the PRICE Futures Group in Chicago, said in a daily emailed newsletter that crude oil inventories were draining in a sign that rebalancing was under way. Nevertheless, operators in U.S. shale basins may be sitting on the sidelines with oil lingering in the mid- to upper-$40s.

"Shale investors put on the breaks until they see if the market starts to stabilize," he wrote.

Crude oil prices wavered between gains and losses in early Friday trading. The price for Brent crude oil was up 0.3 percent at 9:25 EDT to $48.58 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.35 percent to $46.24 per barrel.

Price may be influenced later in the trading day when oilfield services company Baker Hughes releases its weekly report on exploration and production activity. Reported as rig counts, the metric serves as a loose gauge of industry confidence, with gains showing an increased appetite for spending.

State regulators in North Dakota, home to the Bakken shale oil reserve, pointed to $45 per barrel for WTI as the deciding point for rig counts. State counts would be expected to move lower if WTI stays below $45 per barrel for more than 30 days.

Oil market investors are losing confidence over OPEC's effort to offset the glut of supplies, though the impact could be hitting U.S. producers, the IEA said.

The Organization of Petroleum Exporting Countries and a handful of non-member producers in January started implementing a deal to curb output to offset the supply-side strains that pushed oil prices below $30 per barrel in early 2016.

Member states Libya and Nigeria are not participating in the deal so they can steer oil revenue toward national security efforts. Iran is the only member state that has room for production growth so it can regain a market share lost to sanctions. Of the three, Libya and Nigeria are regaining ground rapidly, adding about a quarter million barrels of new oil to the market each day.

With oil prices lingering below yearly highs, a report Thursday from the International Energy Agency said those are just some of the factors rattling investors' nerves.

"Oil investors are going through a period of waning confidence with prices recently returning to levels not seen since early November," its report read. "Each month something seems to come along to raise doubts about the pace of the re-balancing process."

By the IEA's estimate, it's not just three members undermining OPEC's efforts. Total compliance in the deal is at about 78 percent, down from the 95 percent reported in May.

U.S. crude oil production, meanwhile, has proven more resilient to historically low crude oil prices than initially expected as operators in the shale basins in the Lower 48 become more efficient. U.S. oil production has been strong relatively speaking, though lower oil prices in June led to brief declines in output, as well as exploration and production activity.

"Such is the resilience of the U.S. shale sector that we should be careful to pronounce that its expansion will slow, however it could be that the recent exuberance is being reined in," the IEA's report read. "Financial data suggests that while output might be gushing, profits are not."

Total petroleum production in Norway higher than last year
Washington (UPI) Jul 13, 2017
Total petroleum production in Norway so far this is more than 1 percent, or about 9 million barrels, higher than last year, the government said. The Norwegian Petroleum Directorate published data for year-to-date production. About 754 million barrels of oil equivalents were produced so far this year, with most of that existing as oil. The total production so far is about 8.8 million bar ... read more

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