Oil gains on US crude stocks fall, OPEC comments on slower US shale growth
Oil pump jacks
Oilrose on Thursday after industry data showed a surprise drop inUScrudeinventories, whilecommentsfrom anOPECofficial about lower-than-expectedUSshaleproductiongrowthin 2020 also provided some support.
Prices, however, were capped by mixed signs foroildemand in China, the world's biggestcrudeimporter, as industrial output rose more slowly than expected in October, butoilrefinery throughput hit the second-highest level ever.
Brent futures rose 47 cents, or 0.8 per cent, to $62.84 per barrel by 0808 GMT, whileUSWest Texas Intermediatecrudegained 47 cents, or 0.8 per cent, to reach $57.59.
The Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) Mohammad Barkindo said on Wednesday that there would likely be downward revisions of supply going into 2020, especially from United Statesshale, adding that someUSshaleoilfirms see output growing by only 300,000-400,000 barrels per day (bpd).
While Barkindo'scommentssupportedoilprices, there is not a clear way forOPECto forecastoilproduction outside the group, Howie Lee, an economist at Singapore's OCBC bank said.
"I don't see much changes in supply so prices are still trading within the same range from the start of November," he said.
Barkindo'scommentswere also in contrast with forecasts by theUSEnergy Information Administration (EIA) on Wednesday thatUSoilproduction is on course to hit new records this year and next.
The American Petroleum Institute reported on Wednesday an unexpected drop incrudestockpiles by 541,000 barrels in the week to November8, against analysts' expectations of an increase of 1.6 million barrels. Gasoline and distillates inventories increased, the API data showed.
Official weekly EIA data is due at 11:00 a.m. EST (1600 GMT) on Thursday. Both reports were delayed a day for theUSVeterans Day holiday on Monday.
OPECand its allies, including Russia, meet on Dec. 5-6 to discussoutput policy and production curbs of 1.2 million bpd that have been in place since January with the aim of supportingcrudeprices. The pact runsto March 2020.
Barkindo said on Wednesday it was too early to say if further output cutswould be needed.
"They have made it quite clear that they are not reducing production further," said OCBC's Lee. "What Saudi can do now is to urge compliance among members especially Iraq and Nigeria. If they can comply, then they can talk about cuts."