The Dec. 10 agreement between OPEC and 11 other producers could begin to reverse three years of oversupply within the next six months, according to the IEA, Paris-based adviser to 29 industrialized nations. The Organization of Petroleum Exporting Countries itself is less hopeful, predicting that stockpiles won’t fall until the second half of 2017. Khalid Al-Falih, energy minister of OPEC’s biggest and most influential member, Saudi Arabia, was less precise than either institution on Wednesday, saying that he sees supply and demand aligning at some point this year without specifying when. For the Energy Information Administration, a unit of the U.S. Energy Department, that may still be too soon. The EIA’s latest market outlook on Dec. 6 projected that inventories will accumulate by an average 420,000 barrels a day next year. click Read More below for more of the story
Futures were little changed in New York and are up 4.8 percent this month, after rallying 9.4 percent in September. U.S. crude inventories probably declined for a fifth time in six weeks, according to a Bloomberg survey before government data due Wednesday. Saudi Arabian Crown Prince Mohammed bin Salman said last week that he backed prolonging supply curbs, following a similar endorsement by Russian President Vladimir Putin earlier this month.
Global benchmark Brent crude this month topped $60 a barrel for the first time since 2015 on hopes the Organization of Petroleum Exporting Countries and partners including Russia will prolong their curbs aimed at eliminating a glut. Prices were also boosted by fighting between Iraqi government troops and Kurdish forces in the oil-rich Kirkuk region. Still, the potential for continued supplies from U.S. shale fields is a concern.
“The oil market is tightening and the supply surplus is shrinking,” said Norbert Ruecker, head of commodity research at Julius Baer Group Ltd. in Zurich. “Sentiment is very bullish since the market seems to expect that the supply surplus will erode further heading into 2018.”
more detail at: https://www.bloomberg.com/news/articles/2017-10-31/oil-holds-gains-near-8-month-high-as-u-s-supplies-seen-falling