Oil prices rise over unexpected fall in U.S. crude stocks

Oil prices rise over unexpected fall in U.S. crude stocks”

Saudi Arabia sold $12.5 billion worth of bonds, the largest sovereign debt issue this year, as the kingdom taps the worldwide markets again to bolster its finances hurt by lower oil prices.

Ben Luckock, co-head of group market risk at Trafigura, said the Brent crude isn't likely to stay in a tight $40 to $60 a barrel range, according to the Financial Times.

This caused the Brent-WTI spread to rise to a two-year high on September 25, 2017. The more modest rally in WTI widened to more than $6 a barrel the US benchmark's discount versus to Brent.

"The world could be significantly short of oil capacity", Luckock said in a presentation to the annual Asia-Pacific petroleum conference on Tuesday.

Toyota Motor Corp. said it will start production of its first American-made electric-gas hybrid engines, the latest in a series of investments by foreign auto makers to expand operations in the U.S.

A surge in demand for diesel and fuel stock draws following USA refinery outages resulting from Hurricane Harvey have further helped thrust crude prices to near $60 a barrel, analysts said.

Exports reportedly rose over 500,000 barrels a day on the week to 1.49 million barrels a day- "the highest weekly level ever on EIA records", said Vincent. "Now that prices are higher, the US producer should continue to press production higher".

"$50-$60 [a barrel] is where we should be", Christopher Bake, head of origination at Vitol, told the FT.

Still, to keep up momentum in market rebalancing, OPEC and non-OPEC producers will have to extend output cuts beyond next March, said Nadia Martin Wiggen, senior vice president of markets at Rystad Energy. "There is finite patience there".

Contributing some pressure to oil prices Wednesday was strength in the USA dollar.

He said the NPDC was the biggest and largest gas producer in the country and was also the highest supplier of gas to the domestic market.

The biggest unknown is the future of US production, which is expected to rise this year and next.

Oil broke out in another powerful rally on Monday, sending Brent to more than two-year highs above $58 a barrel, as the market continued to draw support from OPEC's stance last week that a three year-glut in crude was ending as supply-demand began to rebalance.

The U.S. Energy Information Administration said that production from wells in shale formations will rise for a 10th month in a row in October.

Global demand growth is higher than that seen in the last couple of years, "coming somewhere close to 1.6 to 1.7 million barrels per day and is driven by distillates", Janet Kong, BP's chief executive, supply and trading, Eastern Hemisphere, told the Singapore conference.

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