Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
[Conrad Doyle, GKMen.com]
Stephen Schork, editor at The Schork Report, told CNBC that oil prices will fall to the lower $50s due to “the fact that USA production continues to hit records and a nice build in gasoline”, and that the current high prices for crude are at the top of the market. The data will give traders a better picture of whether a global rebalancing is taking place in the oil market.
The investment bank raised its forecast for 2018 Brent and WTI to 62 USA dollars and 57.5 dollars a barrel, respectively, as OPEC (Organization of the Petroleum Exporting Countries) and its allies showed a stronger commitment than expected to extending their output curbs.
“Generally speaking, the market is looking more healthy than sick”, said Tamas Varga, analyst with PVM Oil Associates.
Domestic U.S. output has rebounded by nearly 15% since the most recent low in mid-2016, and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices. As Reuters writes in an article “Oil rises 1 percent on China demand, but weekly losses loom”, Brent crude was up 99 cents or 1.6 percent at $63.25 a barrel, but heading for a weekly slide of 0.9 percent.
China’s crude oil imports rose to 37.04 million tonnes in November, or 9.01 million barrels per day (bpd), the second highest on record, data from the General Administration of Customs showed on Friday.
U.S. West Texas Intermediate (WTI) crude futures were at $56.70 a barrel at 0714 GMT, virtually unchanged from their last settlement. Tambar has gross reserves of 27 million barrels of oil equivalent. On Thursday, the department said first-time claims for unemployment for the week ending December 2 dropped 2,000 from the previous week to 238,000.
Labor numbers from the United States have been held out as signs of robust economic growth.
Traders said a stronger dollar, which has gained over 0.9 percent this month against a basket of other leading currencies, was weighing on prices.
Brennock in his report noted recent sessions were characterized by wild swings, but actual prices haven’t moved much since last week.
On Aug. 22, Phil Flynn, a senior market analyst at Price Futures Group, said in his daily energy report that “the market should be expecting a big drop in crude-oil supply” because of OPEC’s production cuts and “signs that US oil output from shale may be peaking”.
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