While everyone is talking about how surging U.S. crude oil production will offset a large part of the ongoing OPEC/non-OPEC production cuts, there are other oil producers not taking part in the OPEC+ deal and poised to see their output jump this year.
Oil prices regained more ground on Wednesday, pushed higher after equity markets rebounded from an initial selloff at the start of 2019 trading. The price gains are not entirely convincing. WTI and Brent posted strong gains, each up more than 3 per cent by midday in New York, but come largely after U.S. equity markets shook off an earlier bout of pessimism.
Oil prices surged in early trading on Monday after the United States and China agreed on a truce in their trade conflict and ahead of a meeting by producer club OPEC this week that is expected to result in a supply cut.
Oil prices edged lower on Friday due to concerns of oversupply and a strong dollar. The two benchmarks, North Sea Brent LCOc1 and U.S. crude CLc1, still have had their weakest month in more than 10 years in November, losing more than 20% as global supply has outstripped demand.
The average price of gasoline at Petrobras' refineries has dropped around 20% in November as of Tuesday but that decrease will not hit retail prices anytime soon. The state-run petroleum company made the announcement Monday, but gas stations were reluctant to follow suit, at least not at the same level.
Over the past few years, Brazil has held several very successful oil auctions under production-sharing contracts in its pre-salt layer, attracting major oil companies to its prized offshore oil area.
Oil prices slumped up to nearly 8% to the lowest in more than a year on Friday, posting the seventh consecutive weekly loss, amid intensifying fears of a supply glut even as major producers consider cutting output. Oil supply, led by U.S. producers, is growing faster than demand and to prevent a build-up of unused fuel such as the one that emerged in 2015, the Organization of the Petroleum Exporting Countries is expected to start trimming output after a meeting on Dec. 6.
Crude prices hit their lowest level since 2017 on Tuesday, sliding further into a bear market after President Donald Trump signaled the US would not punish Saudi Arabia, the world’s largest oil exporter, over the killing of Washington Post journalist Jamal Khashoggi in its Istanbul consulate.
Premier Oil said it expected full-year production to come in at the low end of a previously announced 80,000 to 85,000 barrels per day range. The company, with interests in the Falkland Islands and which has been focusing on cutting debts, also said its debt pile would shrink to US$ 2.4 billion by the year-end.
Oil markets on Friday remained weak as rising supply and concerns of an economic slowdown pressured prices, with U.S. crude now down by 20% since early October. U.S. West Texas Intermediate (WTI) crude oil futures were at US$ 61.63 per barrel.