Yemisi Izuora/Agency Report
Nigeria’s August oil production rose significantly reaching 1.71 million barrels per day, bpd, from 1.53 bpd recorded in July, said the Organisation of Petroleum Exporting Countries, OPEC, in is report released on Wednesday.
Report also said that the US light crude fell $1.31 to a low of $69.06 a barrel and was last at $69.42, down 95 cents.
Oil futures rose on Wednesday, with Brent reaching $80 a barrel, after a larger-than-expected drop in USA crude inventories and as USA sanctions on Iran added to concerns over global oil supply.
US West Texas Intermediate, WTI, crude futures were at $67.61 per barrel up 7 cents from their last settlement.
The U.S. sanctions snapping back in early November are expected to remove 1 million bpd and possibly more of Iran’s oil exports.
South Korea has agreed to comply with USA demands to cut oil imports from Iran to zero, becoming the first to do so out of the top three buyers.
This is one reason that the discount for US crude versus Brent has widened to around $10 per barrel, the biggest since June, traders said.
“Going forward, economic uncertainty, and hence questions surrounding global oil demand, coupled with geopolitical tensions, will need to be factored into maintaining a balanced market in the months to come”, the report said.
US Energy Secretary, Rick Perry, met Saudi Energy Minister, Khalid al-Falih, on Monday in Washington, as the Trump administration encourages big oil-producing countries to keep output high.
Perry was scheduled to also meet with Russian Energy Minister Alexander Novak yesterday in Moscow.
Russia, the United States and Saudi Arabia are the world’s three biggest oil producers by far, meeting around a third of the world’s nearly 100 million barrels per day (bpd) of daily crude consumption.
Russian Energy Minister Alexander Novak said on Tuesday that Russia and a group of producers around the Middle East dominated OPEC, may sign a new long-term cooperation deal at the beginning of December, the TASS news agency reported.
Chinese media Xinhua said the U.S. Energy Information Administration (EIA) forecast on Tuesday that U.S. crude oil production will average 10.7 million bpd in 2018, up from 9.4 million barrels bpd in 2017, and will average 11.5 million barrels bpd in 2019.
“We think oil market fundamentals are increasingly supportive of crude prices, at least at current levels”, said Gordon Gray, HSBC’s global head of oil and gas equity research.