Gas prices expected to remain high this summer

Posted May 03, 2018

However, Trump's threats to re-impose the USA sanctions this month have sent jitters across the global oil market.

"There are worries that Iran's oil exports could fall by about 1 million barrels per day from current levels", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

Venezuela's output has plunged below 1.5 million bpd, down 600,000 bpd since 2016. Ahead of weekly data, crude stockpiles were forecast building last week while refined product inventories were seen declining, a preliminary Reuters poll showed on Monday.

Growing U.S. crude production and stockpiles have weighed on the market. French President Emmanuel Macron earlier last week predicted President Donald Trump will exit the Iran agreement, while U.S. Defense Secretary Jim Mattis said on Apr.26 that a decision on a withdrawal hasn't been made. "For the time being, the risk for the oil price is on the upside".

Production in Libya, which remains unstable due to unrest, edged lower after a suspected act of sabotage briefly stopped flows from Waha Oil Co.'s fields, industry sources said.

Russia's oil production held onto an 11-month high in April, flat compared to March and above its quota under the OPEC/non-OPEC deal for a second consecutive month, according to data by Russia's Energy Ministry. Since sanctions were eased as of January 2016, Iran's crude production has nearly doubled.

Unintended supply disruptions are rife in the cartel.

Rising inventories are partly due to soaring US production C-OUT-T-EIA, which jumped by a quarter in the last two years to 10.6 million bpd. "This, combined with constraints in (OPEC) production, could lead to higher prices".

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Brent crude futures eased on Wednesday, surrendering early gains after evidence of further increases in USA shale supply and a rise in Iranian exports ahead of a possible renewal of US sanctions on Tehran.

OPEC has pledged to trim 1.2 million bpd since January 2017 through the end of this year with allies led by Russian Federation kicking in another 600,000 bpd.

U.S. West TexasIntermediate (WTI) crude futures were up 15 cents, or 0.2 percent, at $67.40 per barrel.

Meantime, U.S. oil exports also hit a record high, a sign that the shale boom will continue to lead to higher shipments overseas, despite some infrastructure bottlenecks.

The oil reached 75 Dollars per barrel this year for the first time since 2014 and traded close to 74 USD per barrel on Monday.

"If that happened, Brent prices could jump to near 90 dollars (a barrel)".

Total products supplied over the past four-week period averaged over 20.1 million barrels per day, up by 2.7 percent from the same period previous year.

Oil prices climbed on Wednesday as the US dollar declined against most major peers. We expect bunker prices may continue slight upward evolution next week.