Oil prices rise on expected growing demand

Leslie Vinjamuri on Uncertainty From Tariffs for American Allies

Leslie Vinjamuri on Uncertainty From Tariffs for American Allies

If this size of a crude build "gets confirmed by the EIA, we'll probably have a few days of lower crude prices".

At the same industry gathering a year ago, Saudi Arabia's oil minister said his country should not have to underwrite the investments of others.

Closer to 2023, global markets will start to tighten and the IEA has warned that more investment is needed to meet growth in consumption and to make up for production lost to natural declines. With total U.S. liquids production set to reach almost 17 million bpd in 2023, up from 13.2 million in 2017, the United States will be by far the world's top oil liquids producer.

For more than a year, OPEC and other producers including Russian Federation have limited production, a strategy that helped boost crude prices. In January, US production exceeded 10 million barrels per day for the first time since the 1970s.

The IEA report predicts that oil production growth from the United States, Brazil, Canada and Norway can keep the world well supplied, more than meeting global oil demand growth through 2020.

Tanker rates from the United States to Asia have also been rising recently, with the cost of shipping a tonne of oil from Houston to China TC-HOU-DLC assessed by Thomson Reuters at $29.01 on March 2, up from $18.44 at the start of February and $16.79 in late September a year ago. But shale firms are enjoying the benefits of OPEC members doing what they can not, driving USA production to a record in late 2017 at more than 10 million barrels a day. "But as we've highlighted repeatedly, the weak global investment picture remains a source of concern".

The strongest growth is expected to come from the Permian Basin, a vast oil and gas pool that lies under parts of Texas and New Mexico.

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Earlier in the day, OPEC Secretary General Mohammad Barkindo said that OPEC has agreed to reconvene with the U.S. shale producers today.

Also, a source close to the talks reported that over 50 companies will take part in the meeting of the Organization of the Petroleum Exporting Countries with the United States shale oil producers.

Gary Cohn, economic adviser to U.S. President Donald Trump, seen as a bulwark against protectionist forces within the government, said on Tuesday he was resigning, triggering a more than 1 percent fall in S&P 500 futures on Wednesday.

In total, the world is expected to add 1.4 million bpd in new petrochemical-producing steam crackers to 2023, the IEA said.

Global oil production capacity is forecast to grow by 6.4 mb/d to reach 107 mb/d by 2023. With forecast capacity of 36.3 million bpd, Opec will be supplying less than 35 per cent of global demand by 2023 compared to its historic share around 40 per cent.

LONDON, March 7 (Reuters) - Oil fell on Wednesday, in line with a broad decline on global financial markets, after a key advocate for free trade in the USA government resigned, feeding concern that Washington will go ahead with import tariffs and risk a trade war.

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