Oil prices up slightly Tuesday
Oil prices rose slightly in trading on Tuesday after OPEC released its forecast for 2018 crude use showing higher demand next year. The cartel also reported its output fell in August.
The monthly report from OPEC said Hurricanes Harvey and Irma will have “negligible” impact on oil demand.
By 1:57 p.m. EDT, benchmark Brent crude was up 38 cents to $54.22/barrel and US WTI rose 20 cents to $48.27/barrel.
Refinery restarts in the US Gulf Coast region following Hurricane Harvey, helped boost expectations for crude consumption.
On Tuesday afternoon, the American Petroleum Institute will release its data on US crude stocks and on Wednesday morning, the United States Energy Information Administration will release its own oil inventory information.
Mark Watkins, regional investment manager at US Bank says this week’s data may be incomplete indicators of the longer-term supply and demand outlook.
In August, OPEC’s output fell by 79,000 barrels per day (b/d) from July’s 32.76 million b/d. According to Reuters, should OPEC keep pumping at the rate seen in August, there will be a small crude supply deficit next year, instead of a 450,000 b/d surplus noted in last month’s report.
OPEC’s report said inventories were dropping and a higher premium for immediate delivery of Brent crude over that for later supplies boosted hopes that the crude market is beginning to rebalance.
However, the US EIA says it expects US crude oil production in 2018 to increase more than previously expected.
The EIA forecasts that 2018 crude output will be up by 590,000 b/d, landing at 9.84 million b/d. In August, it forecast a 560,000 b/d year-over-year increase to 9.91 million b/d.
