by Daniel J. Graeber
Washington (UPI) Oct 26, 2017
Mixed support from supply and demand metrics left crude oil prices in relatively static territory in the early rounds of Thursday trading.
Preliminary data and early reads on supply and demand indicated a slight drain in U.S. crude oil inventories. The U.S. Energy Information Administration, however, posted a surprise 856,000 build, snapping a four-week streak of declines.
Traders are watching supply and demand metrics closely in anticipation of a balancing market. Supply-side strains last year pushed the price of oil below $30 per barrel and movement above $50 per barrel this year is supported by an effort by the Organization of Petroleum Exporting Countries to drain the five-year surplus on global crude oil inventories with managed production declines.
EIA reported U.S. crude oil production at 9.5 million barrels per day last week, 1.1 million barrels per day more than the previous week. Early October production levels were impacted by Gulf of Mexico operations shut down ahead of Hurricane Nate. U.S. oil exports, according to an emailed market report from S&P Global Platts, have "exploded" since late September and put more oil on the global market, offsetting some of the inventory build.
Crude oil prices were stable to mixed early Thursday. The price for Brent crude oil was down 0.26 percent to trade at $58.29 per barrel at 9:15 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was more or less unchanged at $52.21 per barrel.
The spread, or difference, between Brent and WTI means U.S. oil is more competitive against other benchmarks in some markets. A forecast from the EIA, meanwhile, said expectations for WTI are what drive its forecast for crude oil production.
Echoing sentiments about a so-called Goldilocks number, Tamas Varga with London oil broker PVM said in an emailed market report that U.S. crude oil production numbers may be the governor on market direction.
"If one accepts that U.S. shale oil production is primarily the function of the price of WTI then it is unreasonable to expect a prolonged price fall," the report read. "Using the same logic, the upside is limited, too as strong-ish U.S. domestic crude oil price will serve as an incentive to ramp up production."
Boulder CO (SPX) Oct 26, 2017
A rash of earthquakes in southern Colorado and northern New Mexico recorded between 2008 and 2010 was likely due to fluids pumped deep underground during oil and gas wastewater disposal, says a new University of Colorado Boulder study. The study, which took place in the 2,200-square-mile Raton Basin along the central Colorado-northern New Mexico border, found more than 1,800 earthquakes up ... read more
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