Iran's August oil output at 3.828m bpd: OPEC

Posted September 13, 2017

Saudi Arabia has been curbing exports for the past few months to drain global and USA crude oil inventories to support crude oil (UWT) (DWT) prices.

"If OPEC were, as a scenario, not a forecast, to maintain its current level of production throughout the rest of '17 and through '18, then, yes, stocks at the moment would not fall dramatically, but that will change".

"Certain countries do need $60s for their policies", she explained, pointing to next year when the participants need to decide whether or not to renew the agreement for a third term.

The IEA, however, said the surplus during the USA hurricane season provided some market relief because commercial stockpiles were already at comfortable levels.

"The adjustment mainly reflects better-than-expected data from OECD region for the 2Q17, particularly OECD Americans and Europe, as well as China".

Today's U.S. Energy Information Administration's weekly inventories report is expected to show a 4.1 million barrel build.

It stated that: "OECD growth has performed better-than-anticipated in the current year - particularly the Euro-zone and to some extent in the United States - and is now forecast to grow by 2.2 per cent in 2017 and 2.0 per cent in 2018".

"OECD product stocks were only 35 million barrels above the five-year average at end-July", the IEA said.

Oil climbed the most in a week as the International Energy Agency and OPEC improved their outlook for demand.

The near term action in oil prices will depend on how prolonged will be the impact of Hurricane Harvey on U.S. oil infrastructure. The United States Oil Fund (USO) was up 0.11%, while shares in oil-dependent Russian Federation were moving lower.

Some producers in West Texas' Permian or South Texas' Eagle Ford may urge the Port of Corpus Christi or others to expedite the recovery efforts of their port infrastructure capable of moving light tight oil from the state's shale plays.

USA crude stocks rose sharply last week as refinery output declined further in the wake of Hurricane Harvey, causing gasoline stocks and distillate inventories to drop as well, the Energy Information Administration said on Wednesday.

The risk for oil traders is that the forward Brent-WTI spread snaps back violently once USA refineries and export terminals become fully operational again.