nsucurrent.com March 17, 2018

Oil prices dip before USA crude inventory data

04 March 2018, 03:57 | Ruby West

Oil prices were little changed on Thursday after falling in the previous two sessions as investors shied away from riskier assets amid volatile equity markets and the USA dollar gained, limiting overall interest in commodities. Brent Crude Oil price at London's IСE Stock Exchange down by 1.27% to $63.88 per barrel.

"For now though, the gains in USA supply are prevailing in shaping sentiment in the oil market, other analysts said".

US crude is on track for a 4 percent drop this week, its first weekly decline in three, having given up much of the gains in recent weeks when sentiment was boosted by a fall in inventories at the Cushing delivery point for WTI.

The Organization of the Petroleum Exporting Countries (OPEC) will hold a dinner on Monday in Houston with U.S. shale firms, the latest sign of the producer group widening talks about how best to tame a global oil glut.

US light crude CLc1 is forecast to average $58.88 a barrel in 2018, up from $58.11 in the January poll. The WSJ Dollar Index, which measures the USA currency against a basket of 16 others, was recently down 0.26%.

Demand levels, meanwhile, are contributing to overall market balance and indices show US consumer confidence at its highest level in almost two decades.

U.S. crude output slipped in the last month of 2017, but in November hit an all-time high of 10.057 million barrels per day (bpd).

"As a result, in January WTI prices rose as high as US$66 per barrel for the first time since December 2014, before declining slightly in February".

Opec officials will meet United States shale executives at a U.S. energy conference on Monday, underlining the influence of American output on global prices.

"The standoff "shale vs. sheikh" continues to frame the oil market, with the former again gaining the upper hand", Norbert Ruecker, head of macro and commodity research at Julius Baer, told Reuters.

Oil also fell due to a stronger dollar, which makes commodities denominated in the USA currency more expensive for holders of other currencies. The dollar index hit a near six-week high yesterday following consumer inflation figures showing the largest gain in 12 months, Reuters reported.

Opec's cut, which began a year ago, has helped boost prices from levels below US$30 seen in January 2016.

Fawad said the market has been ignoring "good compliance with the production cuts by OPEC and non-OPEC countries".

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