NYMEX crude gains in early Asia with API stockpile estimates...| MENAFN.COM

Wednesday, 10 August 2022 03:13 GMT

NYMEX crude gains in early Asia with API stockpile estimates ahead

(MENAFN- FxPro) Crude oil gained in early Asia on Tuesday with investors focused on U.S. stockpile estimates from the American Petroleum Institute later in the day.
On the New York Mercantile Exchange, WTI crude for October delivery rose 0.17% to $44.16 a barrel.

Overnight, crude futures fell sharply on Monday extending their severe downturn in recent months, as investors continued to digest market-moving comments from the International Energy Agency late last week on dwindling U.S. production.

The losses, however, were not as sharp as the sell-off on international energy markets during Monday's session. On the Intercontinental Exchange (ICE), Brent crude for October delivery traded in a broad range between $47.30 and $49.27, before settling at $47.41, down 1.63 or 3.32% on the day. The spread between the international and U.S. domestic benchmarks for crude stood at $3.34, below Friday's level of $3.48 at the close of trading.

On Friday, the IEA, a Paris-based agency, downgraded its forecast for U.S. production next year, citing the wide-ranging impact of Saudi Arabia's strategic policy aimed at undercutting shale driller in the U.S. In 2016, the IEA predicts that U.S. shale production will fall by 400,000 barrels per day, significantly below OPEC estimates of a 50,000 bpd increase. The IEA is regarded by many experts in the industry as one of the world's foremost providers of statistics and analysis on global energy.

Crude futures are down by nearly 60% since peaking above $100 a barrel in the summer of 2014. Last November, OPEC roiled global energy markets with its decision to keep its production ceiling above 30 million barrels per day in an effort to defend its market share. In addition, the IEA forecasts that global crude output will decline by a half million barrels per day next year, four-fifths of which will be concentrated among U.S. shale producers.

"US oil production is likely to bear the brunt of an oil price decline that has already wiped half the value off," the IEA said in its monthly report.
Last week, the U.S. Energy Information Administration (EIA) said crude output nationwide fell to 9.135 million bpd for the week ending on Sept. 4, marking the sixth consecutive week of declines. In early-June, crude production in the U.S. peaked above 9.6 million barrels per day, its highest on record in more than 40 years.

Investors are hesitant to make any major trades ahead of the Federal Open Market Committee's two-day monetary policy meeting this week. On Thursday, at the completion of the meeting, the Federal Reserve could raise its benchmark interest rate for the first time in nearly a decade.

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