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WTI, Brent crude oil futures settle higher

WTI, Brent crude oil futures settle higher

The nation's crude output has climbed to 9.1 million barrels a day, the most since February previous year, according to the Energy Information Administration.

May Brent crude LCOK7, -0.14% gave up 14 cents, or 0.3%, to $51.62 a barrel on the ICE Futures exchange in London.

Saudi energy minister Khalid al-Falih has said the kingdom will adhere strictly to its commitment to cut output and that state oil giant Saudi Aramco was cutting exports. Opec producers have implemented 100 per cent of the agreed cuts as per latest data with Opec figures reflecting a cut higher than expected.

In a move to beat off competition but which contradicts the announced cuts, Opec's de-facto leader Saudi Arabia unexpectedly cut light crude prices last week.

Members of the Organization of Petroleum Exporting Countries (OPEC) favor extending production cuts beyond June to continue efforts to rebalance global oil markets, according to a new report by Reuters.


With few signs that producers will cut supplies deeply enough to end the glut, and indicators that output is rising in the U.S., traders say only strong demand can eventually rein in the surplus. "A major threat to the market, whether a BAT or simple tariffs are enforced, could arise from diminished oil and product demand as protectionist policies are sure to weigh on economic growth".

The bigger headwind to prices is also the re-emergence of shale output.

The dollar sank to a four-week low against a basket of currencies after the US Federal Reserve raised interest rates for the second time in three months, as expected, but said that further increases would be gradual.

On the inventory side, it remains to be seen if reduced Opec supply leads to significant inventory drawdown in the coming months.

The group wants stocks in the industrialised world to fall to the average of the past five years. Crude oil inventories have risen by ~50 million barrels in the USA so far this year. That's because even the relatively modest oil price recovery of the past year is driving a quick rebound in USA oil production. On the MCX, Crude oil (April) has stiff resistance in 3,270-3,290 zone and short-term bias looks.


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