Oil up on tighter US market, but Opec supplies weigh

LONDON/SINGAPORE: Oil prices rose on Thursday, lifted by signs of a tightening US market, although high supplies from Opec producers weighed on sentiment.
Benchmark Brent crude was up 20 cents a barrel at $52.56 by 0920 GMT. US light crude was 20 cents higher at $49.79.
Strong demand in the United States has been supporting prices. The US Energy Information Administration reported record gasoline demand of 9.84 million barrels per day (bpd) for last week, and a fall in commercial crude inventories of 1.5 million barrels to 481.9 million barrels.
That’s below levels seen this time last year, an indication of a tightening US market. But traders say high production by the Organization of the Petroleum Exporting Countries is capping prices.
Opec and other producers including Russia have promised to restrict output by 1.8 million bpd until March 2018 to help support prices and draw down inventories.
Yet Opec output hit a 2017 high of 33 million bpd in July, up 90,000 bpd from the previous month, a Reuters survey showed earlier this week, led by a further recovery in supply from Libya, one of the countries exempt from a production-cutting deal.
Ample supply is likely to keep a lid on prices, many analysts say.
“Our view of the oil market is that a major rally is unlikely in 2017,” National Australia Bank analysts said in a note to clients. “Absent further production cuts or a sustained uptick in demand, prices are likely to remain in the low to mid $50s for the remainder of the year.”
There are signs that the oil industry has adapted to an era of low prices and can produce and operate at levels that would previously have been uneconomic.
— Reuters