Published: Sat, January 13, 2018
Money | By Armando Alvarado

Oil prices retreat, but set for fourth week of gains By

Oil prices retreat, but set for fourth week of gains By

Between late 2014 and early 2017, Saudi Arabia, Russia and others boosted production to reduce the price of oil and thus undercut shale oil production in North America by making it unprofitable. Another variable to watch will be USA crude oil production. By many estimates US production is set to take off this year - which is concerning for many other producer nations.

Gasoline inventories rose by 4.1m barrels to near the top of the average range, while analysts expected a smaller 2.6m barrel increase.

Prices have fallen for three years straight since then because of a meeting between oil-producing nations on Thanksgiving where Saudi Arabia, the biggest oil exporter, said it would not curb output to balance out an worldwide glut.

Crude oil prices jumped on Wednesday and settled near three-year highs after USA government data showed a drop in crude inventories and production, even as fuel inventories rose.

That's even with a 2.4% rise in global demand this year and 1.7% in 2019, according to the EIA.

Giovanni Staunovo, a commodity analyst for UBS, told UPI there were a variety of factors apart from Trump's decision that were pulling oil prices into negative territory.

"Inventories ended 2017 9.3 percent above the five-year average, a stark contrast to the 35.6 percent surplus seen at the end of 2016", Oil Futures Editor Geoffrey Craig said in a statement emailed to UPI.

The oil market has been buoyant for weeks, with USA crude futures at highs not seen since late 2014, and Brent crude less than US$1 per barrel away from a similar milestone.

Local hospitals experiencing shortage of IV fluids, but not because of flu
It also gave Baxter permission to temporarily import sterile fluids from six overseas factories. Saline solutions are frequently used to treat patients: most commonly to help administer drugs.

In its previous forecast, issued a month ago, the EIA saw production growth of 780,000 b/d in 2018.

OPEC and non-OPEC participants agreed on November 30, to extend the production cuts through the end of 2018 in an effort to reduce global oil inventories. The EIA says it will account for two thirds, or 800,000 b/d of the 1.2 mb/d of oil production growth expected between December 2017 to December 2019.

EIA expects OPEC crude oil output will rise by an additional 0.3 MMBPD in 2019 as crude oil production slowly returns to pre-agreement levels.

The national average price this summer should peak in August at $2.63.

That's bad news for the U.S. coal industry and Donald Trump ambitions to restore coal's fortunes.

But OPEC Secretary General Mohammed Barkindo said there was "no panic" about rising prices. Part of the reason is that demand for diesel, a similar fuel, is increasing.

The generation share of hydropower was more than 7% in 2017 and is forecast to be slightly lower than 7% in both 2018 and 2019.

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