adminBEIJING. – Brent crude held steady above $56 a barrel yesterday, and US crude rose briefly more than $1, after a some viewed smaller than expected rise in US crude stocks as a sign that a supply glut was starting to abate. The gains in futures, however, were capped by a warning from the International Energy Agency that ample global production would still swell world inventories before investment cuts begin to significantly dent output.
“The supply growth in 2015 is likely to continue unabated, albeit at a somewhat lower rate,” Facts Global Energy’s Fereidun Fesharaki said in a note yesterday.
“This all means a weak market in 2015 and even lower oil prices. Demand rebound will not save the oil market,” he said.
Brent March crude futures had ticked down 13c to $56,30 by 3.34am GMT, after losing $1,91 during the previous session on the agency’s expectations. US March crude futures were trading up 30c at $50,32, after falling $2,84 in the previous session.
Oil prices were expected to test support levels, with Brent crude showing a good chance of breaking below $56,21, while US crude could potentially break below $49,88, Reuters market analyst Wang Tao said.
US crude stockpiles rose last week less than half of what analysts had expected as refineries cut output, data from industry group the American Petroleum Institute showed after the oil market settled on Tuesday.
US crude stocks rose by 1,6 million barrels in the week to February 6, the institute said, compared with the expectation for a increase of 3,7-million barrels.
Earlier on Tuesday the International Energy Agency had said the US would remain the world’s top source of oil supply growth up to 2020, even after the recent collapse in prices.
That bearish outlook was supported by the US Energy Information Administration, which kept its 2015 and 2016 domestic oil output forecasts virtually unchanged from the previous
month.
The administration expected total US oil production in 2015 to be 9,3 million barrels a day, slightly lower than the 9,31 million barrels a day forecast in January’s short-term energy outlook.
The head of Kremlin-controlled energy giant Rosneft said on Tuesday that the Organisation of the Petroleum Exporting Countries had erred in not cutting output in a broadside blaming low oil prices on forces from financial speculators to US government policy. – Reuters.
Bongani Ndlovu
Online Reporter