Oil slips as higher USA output looms despite dip in drilling

How Opec Sacrificed Two Members For The Greater Good

How Opec Sacrificed Two Members For The Greater Good

The US consumer price index comes out Tuesday.

Despite the lower rig count, which is an early indicator of future output, activity remains much higher than a year ago when, when just 617 rigs were active, and most analysts expect USA crude oil production, which has already risen by over a fifth since mid-2016, to 10.37 million barrels per day (bpd), to rise further.

US West Texas Intermediate (WTI) crude futures were at US$61.91 a barrel at 0755 GMT, down 13 cents, or 0.2 per cent.

Brent crude futures slipped 54 cents, or 0.8 per cent, to settle at US$64.95 per barrel.

The report followed data from the EIA last week (http://www.marketwatch.com/story/oil-prices-under-pressure-ahead-of-us-supply-data-2018-03-07), which showed an increase of 86,000 barrels a day in total USA crude output for the week ending March 2.

Iran wants OPEC to work to keep oil prices around $60 a barrel to contain USA shale producers, Oil Minister Bijan Zanganeh told The Wall Street Journal in a rare interview, while Saudi Arabia has played down shale's ability to upset the market and has indicated $70 for oil is acceptable. The dollar tends to have an inverse relationship with oil prices, as a weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.

Investors will then be anticipating OPEC's next move as concerns about US production will likely dominate the oil cartel's June meeting in Vienna. "But they may say we can't have these high prices and scale back the cuts". It was the first such decline in seven weeks. "Rising production and inventory in the United States has been reducing fund sentiment since it peaked at the end of January", ING said in a note.

April natural gas bucked the downtrend among its energy peers, settling up 1.7% at $2.778 per million British thermal units, with forecasts for more cold weather in the eastern USA boosting expectations for heating demand.

Nymex reformulated gasoline blendstock-the benchmark gasoline contract-fell 0.6% to $1.89 a gallon.

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