Oil falls after biggest loss in two weeks on rising U.S. supply

Cornelia Mascio
Febbraio 7, 2017

First indications of compliance to that deal showed members cut production by 900,000 barrels a day (bpd) in January, according to Petro-Logistics, which tracks Opec supply.

A short-term estimate of the U.S. energy market is expected later Tuesday from the U.S. Energy Information Administration and its publication is likely to play a role in influencing the direction of crude oil prices for Tuesday. The group agreed in late November to cut production in order to support sagging oil prices. While Opec members implement pledged cuts and Russian Federation says its own reductions are ahead of schedule, U.S. production has edged higher as drillers boosted the rig count to the most since October 2015.

US West Texas Intermediate (WTI) futures were up 18 cents at US$54,01 a barrel.

Total U.S. oil production has yet to reveal any major impacts from shale, though the steady increase in rig activity could be a sign of an emerging trend. The contract lost 82 cents to $53.01 on Monday.

Concurrently, Comex silver was up 0.27% or 5 cents at $17.74 an ounce, while spot platinum was 0.73% or $1.75 lower at $1,007.40 an ounce, still clear of the psychological $1,000-level it last breached in January.

"Rig counts are increasing at an accelerating pace, and given the technological advances of the past three years, this should translate into significant supply", Wittner said. The global benchmark traded at a premium of US$2.08 to April WTI.

In this series, we'll take a look at the correlations between crude oil-weighted stocks and crude oil. BP said today it made a "small" loss trading oil in the fourth quarter, while Shell last week said profits "flattened" in late 2016.

In a note to clients, analysts at JBC Energy said that the oil market is in need of a strong new catalyst to breach $57-level and move higher towards $60, which is not forthcoming at the moment.

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