Crude rebounded over 5 percent last month, recouping February’s losses, after U.S. President Donald Trump named hawkish officials to his government, signaling the nation may pursue a more hard-line stance toward Iran. Even so, concerns persist that a rapid increase in American production, which has topped 10 million barrels a day each week since early February, could undermine efforts by the Organization of the Petroleum Exporting Countries and its allies, which are trying to balance the market by cutting output. U.S. explorers cut the number of rigs by the most since November 2017 last week, bringing the total to 797, Baker Hughes data showed. Still, the count remains near the highest in three years, and with separate data showing nationwide crude inventories climbed 1.64 million barrels in the week ended March 23, jitters over increasing U.S. supplies remain. Click Read More below for additional information.
American Dollar to Canadian Dollar = 0.804502
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A short-term market report from the U.S. Energy Information Administration finds production will decline in most of the Lower 48 states and Alaska because of the pressure from lower crude oil prices, which the report said should stay below $40 per barrel through the first half of 2017. Onshore declines, the report said, should be offset by gains in the Gulf of Mexico in part because the offshore areas are less sensitive to short-term volatility in crude oil prices. "Several projects in the Gulf of Mexico that began operations or that will begin operations in 2014-16 will increase [regional] production from an average of 1.5 million barrels per day in 2015 to 1.9 million bpd in the fourth quarter of 2017," the report said.
Futures were little changed in New York, having recovered 6.3 percent since slumping to a five-month low on May 5. Stockpiles probably dropped by 2 million barrels last week, according to a Bloomberg survey before Energy Information Administration data Wednesday. In addition to the potential extension of the OPEC agreement into 2018, some ministers have also discussed the possibility of deepening their output cuts, said four delegates. “There is a general belief that OPEC will leave its quota system in place,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London. “If that is the case then global inventories should fall about 1 million barrels a day in the second half of the year.” click Read More below for additional detail