geopolitical tensions in Eastern Europe and the Middle East, oil prices have
dipped this week in response to robust supply and a weak world economy whileUS
production is at the highest level since 1987.
On Wednesday the US
Energy Information Administration (EIA) reported a rise of 1.4m barrels in oil
supplies for the week ended Aug. 8.
Brent, the world's price
benchmark, for September settlement gained $1.26 to close at $104.28 a barrel on
the London-based ICE Futures Europe exchange. The contract touched $102.37, the
lowest intraday level since July 1, 2013.
Bloomberg News reported
that WTI (West Texas Intermediate) for September delivery rose 22 cents to
settle at $97.59 a barrel on the New York Mercantile Exchange. Volumes were 12%
higher than the 100-day average. The US benchmark crude traded at a $6.69
discount to Brent, up from $5.65 yesterday.
The WTI is down by $8.74
in 12 months.
Tuesday that "US total crude oil production averaged an estimated 8.5 million
barrels per day (bbl/d) in July, the highest monthly
level of production since April 1987. US total crude oil production,
which averaged 7.5 million bbl/d in 2013, is expected to average 8.5 million
bbl/d in 2014 and 9.3 million bbl/d in 2015."
Also on Tuesday, the
Paris-based International Energy Agency (IEA) -- the energy watchdog for 28
industrialised countries including Ireland, in its Oil Market Report (OMR) for August lowered its 2014 global
oil demand growth forecast by 1.0m barrels per day (mb/d)
lower-than-expected deliveries in the second quarter and the International
Monetary Fund's weaker outlook for economic growth. But as the economy improves
in 2015, demand is set to accelerate by 1.3 mb/d in 2015.
OPEC crude oil supply rose by 300,000 barrels per
day (300 kb/d) to 30.44 mb/d in July, a five-month high, as a boost from Saudi
Arabia to 10 mb/d and a tentative recovery in Libyan output more than made up
for declines in Iraq, Iran and Nigeria. The "call on OPEC crude and stock
change" averages around 30.8 mb/d for the fourth quarter, just like in the
third, the OMR informed subscribers.
The global oil supply increased 230 kb/d in July, to
93.0 mb/d, with higher OPEC output countering slightly lower non-OPEC supply.
Compared with July 2013, global supplies rose 840 kb/d, as a 1.2 mb/d increase
in non-OPEC supplies more than offset a 360 kb/d decline in OPEC output.
OECD industry stocks posted their
sixth consecutive monthly build in June, rising 13.8 mb to stand at 2 671 mb at
the end of the month, their highest level since September 2013. Inventories'
deficit to the
five-year average narrowed to 42.1 mb from 52.0 mb at the end of May. The
second-quarter stock build of 88 mb was the largest quarterly build since the
third quarter of 2006.
The IEA said global refinery activity saw diverging trends in
June. A counter-seasonal fall in OECD throughputs contrasted with record highs
in key non-OECD countries. The OMR estimated second-quarter global
refinery runs at 76.5 mb/d, 1.3 mb/d more than a year earlier and 0.2 mb/d
higher than in the previous OMR. Projections for the third quarter
remain unchanged at 77.8 mb/d.