Oil prices fall on rising US output

A petrol pump. (AFP/Pedro Pardo)
Updated 14 December 2017
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Oil prices fall on rising US output

LONDON: Oil prices fell on Thursday after the International Energy Agency (IEA) increased its forecast for US oil output growth in 2018, raising the prospect of excess supply.
Brent crude futures were at $62.03 a barrel at 1201 GMT, down 41 cents, after hitting a session high of $63.14.
US West Texas Intermediate futures fell 30 cents to $56.30 a barrel, down from a high of $56.93.
The Paris-based IEA said US crude output next year would climb by 870,000 barrels per day (bpd), up from its November forecast of 790,000 bpd.
The change mirrors upward revisions issued by the Organization of the Petroleum Exporting Countries and the United States government.
“The IEA underlined the same take that the US Energy Department had the day before yesterday and OPEC had yesterday,” said Bjarne Schieldrop, chief commodities analyst with SEB Bank, adding that further upward revisions for growth could follow.
With cash pouring into the US shale oil industry, the United States is on track to deliver up to 80 percent of the world’s oil production gains through 2025, the IEA estimates.
OPEC revised its estimate for US oil output growth for 2018 to 1.05 million bpd, while the US Energy Information Administration increased its growth forecast to 780,000 bpd.
The IEA expects the oil market to have a surplus of 200,000 bpd in the first half of next year before reverting to a deficit of about 200,000 bpd in the second half. This meant 2018 overall would show “a closely balanced market.”
For now, Brent prices remain underpinned by an outage on the Forties crude pipeline that is expected to last several weeks.
Operator Ineos declared force majeure on crude oil, gas and condensate deliveries from the pipeline, a source familiar with the matter told Reuters on Wednesday.
A fall in US crude inventories last week also lent some support. Stocks fell by 5.1 million barrels in the week to Dec. 8, the fourth consecutive week of decline, to 442.99 million barrels, the lowest since October 2015.


Egypt hikes gas prices by up to 75 pct in IMF-backed austerity plan

Updated 18 min 10 sec ago
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Egypt hikes gas prices by up to 75 pct in IMF-backed austerity plan

  • The increases follow hikes to fuel, electricity and public transport prices

CAIRO: Egypt said on Saturday it was raising the price of natural gas for home and commercial use by up to 75 percent, the latest move in an IMF-backed austerity program that has left many Egyptians struggling to make ends meet.
The increases follow hikes to fuel, electricity and public transport prices that are part of a $12 billion IMF loan program signed in 2016 that aims to lure back investors and lift the economy battered by political turmoil since 2011.
The government statement published in the Official Gazette said that, effective Aug. 1, the price for consuming up to 30 cubic meters of gas had been set at 0.175 Egyptian pounds ($0.0098) per cubic meter, up from 0.100 pounds.
The price for consuming between 30 and 60 cubic meters was set at 0.250 pounds, up from 0.175 pounds, while consumption of more than 60 cubic meters was set at 0.300 pounds from 0.225 pounds.
The statement did not specify the timeframes over which the consumption levels apply. But officials said they covered the usual billing period, which is monthly in Egypt.
Price hikes under the three-year IMF program helped drive up Egypt’s annual urban consumer inflation rate to 14.4 percent in June. Analysts said the impact of cutting energy subsidies was feeding through to the broader economy faster than expected.

($1 = 17.8500 Egyptian pounds)