The selloff in oil prices sustained during the later hours of the USA session yesterday continued on Friday, as investors mulled over the prospect of a ramp-up in US output after Trump announced that the U.S.is withdrawing from the 2015 Paris climate agreement. Brent crude futures were up 1.1 per cent to us$51.31 a barrel. It has been estimated that even if the number of rigs are not increased any more, the level of US crude output would rise by approximately 785,000 barrels per day in the next couple of months.
The U.S. Energy Information Administration (EIA) was due to report its official figures for U.S. stockpiles at 1500 GMT on Thursday and investors were waiting to see if the API figures were confirmed. Gasoline inventories fell by almost 2.9 million barrels last week.
Meanwhile, the EIA added, distillate stockpiles, which include diesel and heating oil, rose by 394,000 barrels, versus expectations for a 755,000-barrel drop. West Texas Intermediate crude futures fell $1.45 cents to $46.91/bbl.
After settlement, both benchmarks fell, failing to sustain the lift from the morning news of declining USA crude and gasoline stocks.
The Organization of the Petroleum Exporting Countries extended a 2016 agreement which calls on most of its members and several non-members to collectively lower their oil output to help support oil prices.
Sechin, a close ally of Russian President Vladimir Putin, expects shale oil output to rise by about 1.5 million barrels per day next year, near the cut targeted by OPEC and its allies.
"A decrease in production under an agreement between OPEC and non-OPEC could largely be balanced out by an increase in US shale oil production by the middle of 2018", Rosneft Oil Co.
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Other countries insist they will remain committed to the Paris Agreement even without one of its key architects. And they warned the United States would be hardest hit - economically and diplomatically by the fallout.
OPEC, had earlier in the year, agreed as a cartel to cut daily production of crude to shore up prices.
Growing worry over crude oversupply after Libya increased output has sent worldwide oil prices lower, which is likely to result in a price cut of NT$0.5 (US$0.017) per liter for gasoline and diesel at CPC Corp.
"Lower oil output from the Opec and non-Opec agreement could be considerably offset by as early as mid-2018 by U.S. shale oil production growth", he warned, adding to the market angst.
Russia's most powerful oil boss said output curbs by OPEC and its partners probably will not succeed over the long term as USA shale fills the supply shortfall.
Still, oil markets received some support from official US data that showed the country's crude inventories fell sharply last week as refining and exports surged to record highs.