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Oil prices drift lower on future production expectations
by Daniel J. Graeber
Washington (UPI) Nov 14, 2017

Crude oil prices drifted further away from recent highs Tuesday following a forecast for non-OPEC production growth that outpaces demand next year.

The World Energy Outlook from the International Energy Agency said it expected the 8 million barrel per day increase in U.S. shale oil production growth from 2010 through 2025 will match the record for the highest pace of production growth for a single country in recorded history.

While the national refinery sector is tooled in a way that makes it dependent on heavier oils like those coming from Canada and some members of the Organization of Petroleum Exporting Countries, the report said the United States is to become a major oil exporter because of growth from shale.

"With the United States accounting for 80 percent of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, the world's consumers are not yet ready to say goodbye to the era of oil," the world outlook read.

In its monthly, and separate, monthly market report, the IEA said non-OPEC production would likely be more than demand next year and leave the market in surplus. The balance between supply and demand next year, the report read, "does not look as tight as some would like."

The price for Brent crude oil was down 0.36 percent at 9:15 a.m. EST to $62.93 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.42 percent to $56.51 per barrel.

The wide spread, or difference, between Brent and WTI is supportive of U.S. crude oil prices because the discount makes U.S. oil competitive in the open market, particularly in Asia.

The batch of market data out so far in November comes weeks before OPEC ministers sit down in Vienna to review the terms of their multilateral effort, which draws support from non-member states like Russia, to drain the surplus on the five-year average of global crude oil inventories with managed production declines.

The balancing act is working so far as designed, but may be supporting markets to the point that drillers are returning to work as conditions improve. Expectations that OPEC will extend the agreement deeper into 2018 may be already priced into the market.

Tamas Varga, a market analyst at London oil broker PVM, said in an emailed fundamentals report that markets may retreat further if OPEC ministers back a short-term extension. Compliance with the deal is above 100 percent, but some of those cuts are temporary responses to violence in countries like Iraq, where violence in the northern Kurdish region sidelined some output.

"If the geopolitical situation normalizes OPEC production could quickly climb higher again," he wrote.

Traces of major palm oil spill still linger in Hong Kong
Hong Kong (AFP) Nov 13, 2017
Traces of palm oil are still fouling a remote part of Hong Kong's shoreline three months after a major spill caused by a ship collision, environmentalists say. One thousand tonnes of the solidified oil leaked from a cargo ship which collided with another vessel near the Pearl River estuary in early August. More than 200 tonnes reached Hong Kong's shores, forcing beaches to close and kill ... read more

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