Oil rises as United States stockpiles fall

Futures slid 1.5 percent in NY.

OPEC crude output rose in May driven by gains from Libya and Nigeria who are excused from the agreement to cut production in an effort to recover oil prices. U.S. shale production requires a higher price to be profitable.The agreement proved to be partially successful, as it managed to keep the prices oil prices above $50 per barrel, giving a fiscal boost to major producers.More than 400 oil rigs are now working United States shale fields – an increase of more than 120 per cent compared with a year ago. American oil explorers, having learned to operate more efficiently during a two-year market slump, have restored nearly all the output lost during the downturn. “His comments certainly registered with the market”.

Goldman Sachs agrees that the USA oil boom looks to be back on track.

USA shale production can fill the shortfall from production cuts by OPEC and Russian Federation by the middle of next year, Rosneft Oil Co.

He said the nation’s oil production was still hovering around 1.5 million barrels per day, down from around 2.2 million b/d. Both contracts ended the week down more than 4 percent. CPC calculates its weekly fuel prices based on a weighted oil price formula made up of 70 percent Dubai crude and 30 percent Brent crude.

USA light crude was expected to average $53.52 a barrel this year, dipping from last month’s forecast of $54.73.

Last week OPEC and a number of non-OPEC producers extended a deal to cut 1.8 million bpd in supply until March 2018.

Crude inventories fell 6.4 million barrels (bbl) in the week to May 26, far more than analysts’ expectations for a decrease of 2.5 million bbl.

Oilfield services firm Baker Hughes (NYSE:BHI) on Friday reported its weekly count of oil rigs rose by 11 to a total 733.

Tensions in West Asia, where top oil exporter Saudi Arabia cut ties with top liquefied natural gas (LNG) shipper Qatar over concerns about terrorism and extremism, also pushed up crude futures, traders said.

While the nine-month extension of the output caps was “optimal”, participants have the tools to extend or shorten the agreement if necessary, Novak said.

“The real deal is that the OPEC folks needed to take barrels off the market”. “The market’s not buying their story anymore”. The March production figure is about 0.5 percent lower than the department’s earlier estimate of 9.15 million barrels a day for the same month, a sign that US output could come in lower than the agency has forecast this year. It estimated that large operators such as Anadarko Petroleum Corp. and Marathon Oil Corp. are expected to increase output by 400,000 barrels a day, with smaller independent producers projected to add a further 100,000 barrels.