rss icon Subscribe
desktop mobile

Oil Falls After U.S. Drilling Picks Up

File Image (CREDIT: AdobeStock / (c) Shamtor)

Posted by Joseph Keefe

Oil prices still near highest since mid-2015 on OPEC deal.
Oil fell on Monday after U.S. shale drillers last week added more rigs but prices still held close to their highest since mid-2015, supported by an extension to output cuts agreed last week by OPEC and other producers.
Drillers in the United States added two oil rigs in the week to Dec. 1, bringing the total count to 749, the highest since September, energy services company Baker Hughes said in its closely followed report late on Friday. <RIG-OL-USA-BHI>
February Brent crude futures were down 62 cents at $63.11 a barrel by 1230 GMT, while U.S. West Texas Intermediate was down 63 cents at $57.73.
The Brent price hit a two-year high of $64.65 a month ago and has since attracted record investment by fund managers.
The U.S. rig count, an early indicator of future output, has risen sharply from 477 active rigs a year ago after energy companies boosted spending plans for 2017.
Drillers were encouraged during 2017 to increase activity as crude prices started recovering from a multi-year price slump after the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers, including Russia, agreed to production cuts a year ago.
Last week the producers agreed to extend those cuts of 1.8 million barrels per day (bpd) until the end of next year.
"Market reaction has been positive so far. There are only two worrying aspects ... One is that Iraq's indiscipline has not been discussed, at least not publicly," PVM Oil Associates strategist Tamas Varga said, referring to Baghdad's compliance with output cuts.
"The second is OPEC's own forecast for next year. They are by far the most bullish on 2018, with the annual call on their oil at 33.42 million bpd," he said.
The forecast is much higher than those of the U.S. government at 32.70 million bpd and the International Energy Agency's prediction of 32.38 million bpd."
The latest agreement allows for producers to exit the deal early if the market overheats. Russian officials had expressed concern that extending the cuts might encourage U.S. shale oil companies, which have been a thorn in OPEC's side, to pump more crude.

U.S. output rose in September to 9.5 million bpd, the highest monthly output since 9.6 million bpd in April 2015, government data shows. On an annual basis, U.S. output peaked at 9.6 million bpd in 1970.

By Amanda Cooper

Dec 4, 2017

 

Contracts

Austal Awarded Two More Independence-variant LCS

(U.S. Navy photo courtesy of Austal USA)

The U.S. Navy awarded a contract modification to shipbuilder Austal USA to build two additional

Gulftainer Signs 50-year Lease for Port of Wilmington

Peter Richards, Group CEO of Gulftainer; Delaware Gov. John Carney; H.E. Yousef Al Otaiba, Ambassador of the United Arab Emirates to the United States; and Badr Jafar, Chairman of Gulftainer’s Executive Board, at the ceremony marking the Port of Wilmington concession agreement signing. Photo by Gulftainer

Gulftainer, the world’s largest privately-owned independent port operator and logistics company

Hyundai Mipo Dockyard Licensed by GTT

GTT has signed a Technical Assistance and License Agreement (TALA) with South Korean shipbuilder Hyundai Mipo Dockyard (HMD) targeting the outfitting of gas carriers

Energy

Goliat Oilfield Shut for Maintenance

(Photo: Eni)

Oil production at Eni's Arctic Goliat field off the coast of Norway was shut on Monday for planned

Iran Floats Surplus Oil as Demand Falls Ahead of US Sanctions

© Kees Smits / MarineTraffic.com

Two tankers carrying Iranian condensate, a type of ultra-light oil, have been floating off the

Aker BP CEO Predicts Fast Johan Sverdrup Ramp-up

Illustration / TRY courtesy Equinor

Aker BP, a partner in Norway's giant Johan Sverdrup oilfield, expects a fast ramp-up of production

Maritime Apps