OPEC chief says producers seek market stability

Brent crude futures dipped 18 cents at $54.71 a barrel as of 11:16 a.m. EDT (1516 GMT), while USA crude futures lost 19 cents to $52.22 a barrel. Goldman Sachs has also made similar comments, saying ample inventories that have undermined the output cuts are set to shrink and calling for more patience from the market. Fuel supplies are shrinking week after week at a time refineries are stepping up their crude processing ahead of the summer driving season. For Opec countries, compliance has been impressive from the start while non-Opec participants are gradually increasing their compliance rate, although in their case it is harder for analysts to verify the data.

“A draw in crude oil inventory was ultimately washed by a surprise build in gasoline”, said John Macaluso, an analyst at Tyche Capital Advisors. Markets are braced for more geopolitical tensions over North Korea, after its attempted launch on Sunday of a ballistic missile failed as the projectile blew up nearly immediately. Chief Executive Officer Amin Nasser said during an event at Columbia University in New York April 14.

Iran is showing “good cooperation” under the deal, Almarzooq said. That would be up about 500 MMcf/d from April and be the seventh monthly increase in a row.

Russia’s energy minister told reporters earlier that Russian Federation would achieve a daily reduction of oil production of 250,000 barrels in the deal with OPEC by mid-April. The group agreed to let Iran pump an additional 90,000 barrels a day to reach output of about 3.8 million as the country recovers from sanctions.

Looking ahead for oil, “the next big market mover looks to be when OPEC meets regarding an extension in production cuts on May 25”, said Macaluso.

“Inventories remain stubbornly high”, said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.

US crude oil production reached 9.24 million barrels per day (bpd), according to the latest Energy Information Administration data, making it the world’s third-largest producer after Russian Federation and Saudi Arabia. As China increased its imports to address a growing gap between its domestic production and demand, it surpassed the United States as the world’s largest net importer of total petroleum (crude oil and petroleum products) in 2014.

From a longer term perspective, gross crude oil imports in 2016 were still 22 per cent lower than their 2005 high of 10.1 million b/d.

Net bullish bets on gasoline climbed 19 percent to the highest since February. United States explorers added 11 rigs last week, capping the longest stretch of gains since 2011, according to Baker Hughes Inc. data.