Oil Prices Rally Despite U.S. High Output

CL1 Daily Chart

CL1 Daily Chart

Last week, oil prices hit fresh 2019 highs, driven up by optimism that the USA and China will forge a trade deal and that OPEC's resolve to rebalance the market will outweigh soaring US oil production.

But foremost investment bank, Goldman Sachs, said Brent crude oil prices could reach between $70 and $75 a barrel in the near term, with an upside potential of exceeding the $67.50 a barrel forecast.

Cargoes bought for loading in the first four months of 2019 were sold at discounts ranging from 5 cents to 40 cents a barrel, even as producer Abu Dhabi National Oil Company (ADNOC) cut the grade's benchmark price for four consecutive months. From Feb 8 to Feb 22, Brent prices gained 8.1%.

West Texas Intermediate futures were little changed after settling at a three-month high on Friday.

WTI also set a fresh intraday high for 2019 at $57.81 and posted a 3-percent weekly rise. President Donald Trump said in a tweet he'll delay a tariff increase on Chinese imports that was set for March 1 after "substantial progress" in negotiations.

(MENAFN - Baystreet.ca) US crude oil production hit a record 12 million bpd in the week ending February 15, rising by 100,000 bpd from 11.9 million bpd in the previous week, the weekly EIA petroleum data showed as American production is growing faster than forecasts suggested just a few months ago.

Members of the Organization of the Petroleum Exporting Countries together with non-OPEC producers such as Russian Federation have agreed to cut production by 1.2 million barrels per day this year to help balance the market and support prices. "Demand should start to pick up as well and create a benign situation in the oil market with fundamental support both from tighter supply and stronger demand".

Hundreds more leave Syria IS holdout: AFP reporter
In Syria, it retains a presence in the vast Badia desert, and the jihadists have claimed deadly attacks in SDF-held territory. He said that the Iraqi authorities will scrutinize all the people who have been received from Syrian Democratic Forces (SDF).

In its February Short-Term Energy Outlook (STEO) published last week, the EIA estimates that US crude oil production averaged 12.0 million bpd in January, up 90,000 bpd from December.

"Even as the rig count fell, US production is rising with shale-oil drilling becoming more efficient".

"2019 averaging 12.5 million bpd", US bank Citi said following the release of the EIA report.

U.S. exports hit a record 3.6 million bpd this month. [RIG/U] The report indicates the direction of future crude oil production.

The group, known as OPEC+, agreed in December to cut output by 1.2 million bpd to prevent a crude supply glut from growing.

USA energy firms this week cut the number of oil rigs operating for the first time in three weeks.

"Long-dated oil prices will likely remain under pressure below $60 per barrel Brent and $55 per barrel WTI", Goldman said.

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