Oil Rebounds, Finds Support After Sliding Below $47/Bbl

A man wearing traditional Qatari clothing walks along a beachfront opposite new highrise buildings under construction on the man-made peninsula called The Pearl

A man wearing traditional Qatari clothing walks along a beachfront opposite new highrise buildings under construction on the man-made peninsula called The Pearl

US oil demand fell by 1.4 million barrel a day to 19.34 million barrel a day.

Finally, earlier in the week, the EIA said on Tuesday that USA crude oil production could hit a record 10 million barrels per day next year, up from 9.3 million bpd now.

Commodities brokerage Marex Spectron said it expects a "lower supply of crude oil on the physical market" in the coming weeks, lending oil prices some support. The country also produces 1.48 million barrels of oil per day and is a member of the Organization of the Petroleum Exporting Countries (OPEC).

The price for Brent crude oil was down 1 percent about 15 minutes before the start of trading in NY to $49.64 per barrel.

However, last night's data from the American Petroleum Institute (API) said USA inventories fell by 4.6m barrels last week, beating analysts' expectations.

World fuel production and consumption is roughly in supply and demand balance, at nearly 98 million bpd, although inventories remain somewhat bloated, according to the US Energy Information Administration (EIA).

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Brent crude was trading at US$49.53 (RM211.17) per barrel at 0658 GMT (1458 in Malaysia), up 6 cents, or 0.1 per cent from its last close.

Oil prices across the globe were on the rise on Monday - a direct impact of the tensions in the Middle East - and an effect of the production cut by OPEC. US crude futures fell sharply, dropping more than 4 percent to $46.12 a barrel as of 11:04 a.m. ET (1504 GMT).

The United States Oil ETF (NYSEMKT: USO) traded down about 4.4%, at $9.53 in a 52-week range of $9.23 to $12.45.

Iran is the only OPEC member with room for growth under a current deal to stem production in an effort to balance the market. One week does not make a trend so I suspect investors may turn off the selling pressure until at least next week's EIA data is released. He pointed to high levels of crude production in the United States, the North Sea and the potential for rising output from Libya and Nigeria.

OECD liquid fuels consumption will increase from 46.85 million barrels per day in 2016 to 47.14 million barrels per day in 2017 and 47.5 million barrels per day in 2018, the report said.

Surplus oil in many parts of the world and developments with Qatar had traders nervous, even after Kuwait Oil Minister Essam al-Marzouq said Qatar remained committed to restricting crude output under an agreement between OPEC and several non-OPEC suppliers.

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