Moves in crude oil prices impact on oil and gas producers like Stone Energy (SGY), Northern Oil & Gas (NOG), and Bill Barrett (BBG). Last Friday, oil prices have risen throughout the week on news of a higher demand in China and closed to $46.54 although some markets are still concerned regarding an oversupply due to the lower than expected decline in the United States crude oil production. "I think that seems to have been priced in for the moment", said Gene McGillian, manager of market research at Tradition Energy.
KPI's parent, Kuwait Petroleum Corp. - the company in charge of the nation's oil production - is considering boosting capacity to 4.75 million barrels a day by 2040, he said.
Despite the agreement, the oil price has suffered a major selloff on the day of the agreement and was down around 3 percent by the end of the day. Saudi Arabia and its GCC allies Kuwait and Abu Dhabi, whose compliance on the November quotas was a stellar 90 per cent, lost both market share and revenues on an epic scale. That signals a disruption in the output from Nigeria. The global benchmark crude traded at a premium of US$2.18 to September WTI. Iran, Algeria and Iraq also gamed the Opec deal by ramping up production during the two months between the negotiation of the Saudi-brokered pact and the year-end deadline for output cuts.
Futures were little changed in NY, after rising 5.2 per cent last week.
Oil Prices Remain High On China Demand
While OPEC-led cuts have offered prices some support, rising supplies from Nigeria along with Libya, two OPEC states exempt from the pact, and increasing US production have weighed on the market.
The latest news from oil-producing countries confirmed the persistent difficulty in reducing production to raise the price of oil. A decline in global oil inventories has now begun.
"We are emphasizing a surprising improvement in USA product demand since late spring as a significant driver of higher.prices", Mr. Ritterbusch said in a Monday note. This is the reason I accumulate Total at?42, Chevron at 102, Oxy at 58.
Even though the news about higher OPEC production made more headlines in the past weeks, but oil traders are said to be at ease with the situation because of the of IEA reports, which note oil demand is growing faster than previously expected. It is time to morph into an admittedly nervous oil bull. However, the slower pace of additions, as well as a much larger-than-expected decline in US crude stocks reported by the Energy Information Administration last week of 7.6 million barrels, suggests the torrid pace of American production could be easing.More news: Threatening letter left at Dean Heller's Las Vegas office