Iran oil production back around pre-sanction level: BP

Author

15 June, 2017

The increase came despite efforts by the Organization of the Petroleum Exporting Countries and a handful of external producers to drain stocks below five-year averages and reduce global output by 1.8 million barrels a month until March 2018.

The price of a barrel of oil fell further to $47.12 on Wednesday after new data from the American Petroleum Institute showed United States crude stocks had risen 2.8m barrels in the week to 9 June.

DeAngelis added that the anticipated 1 million bpd demand for the rest of this year "is not enough [to balance the market] given the boost we're seeing here".

"The market has weakened on the API data", said David Lennox, a resource analyst at Fat Prophets in Sydney.

However, rising US production has stymied OPEC's efforts to rebalance markets.

Last month, Iran exported about 1.1 million bpd to Europe including Turkey, nearly reaching pre-sanction levels and only slightly below the 1.2 million bpd supplied to Asia, the source said.

The U.S. Energy Information Administration reported a smaller-than-expected decline in crude-oil stockpiles last week, pushing prices below $45 a barrel and to the lowest levels since November.

For oil traders, hedging data serves as a leading indicator of future supplies.

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"This suggests that production cuts by 11 Opec members, who have committed to the reductions, are increasingly coming at the expense of market share".

"Crude oil is still struggling to rebound", said Olivier Jakob, strategist at Petromatrix, adding that Opec's gradual approach to rebalancing was giving U.S. producers time to drill new wells that were undermining the impact of the group's cuts.

Despite OPEC and other producers curbs to production, oil stocks are near record highs in some regions of the world, while OPEC members exempted from the oil deal continue to increase production.

The OPEC production figures were for 13 members and did not include Equatorial Guinea, which joined last month.

"For total non-OPEC production, we expect production to growby 700,000 bpd this year, but our first outlook for 2018 makessobering reading for those producers looking to restrainsupply", the IEA said. The API reported builds of around 2.8 million barrels in U.S. commercial crude stocks and around 1.8 million barrels in gasoline stocks.

Both contracts hit their lowest since May 5, driving them into technically oversold territory.

The IEA has revised its forecast upwards for U.S. oil production this year, and said Brazil and Canada were also expected "to make further gains".


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