Iraq Is New Oil King, Beats Saudis in Fastest Growing Market

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Oil prices fell by one per cent early on Wednesday after data showed a build in usa crude stocks and OPEC reported a rise in its production despite its pledge to cut back.

US crude fell 3.57 percent to $44.80 per barrel and Brent was last at $47.01, down 3.51 percent on the day.

Additionally, gasoline stocks rose by 2.1m barrels, compared with analysts' expectations for a 457,000 to 500,000-barrel drop, casting doubt on a rise in demand during the United States summer driving season.

He said that USA refinery inputs hit a record last week, with the amount of crude processed at just over 1 million barrels a day more than the same time a year ago.

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Prices had already been trading lower in the wake of a report from the International Energy Agency which that warned the global oil glut will persist this year despite efforts to curb supply.

"Where oil prices go will be determined by the flow of inventory data", said Greg McKenna, chief market strategist at Australian futures brokerage AxiTrader.

The flow surge should show up in USA imports data sometime in late July. US West Texas Intermediate (WTI) crude futures were at $45.94 per barrel, down 52 cents, or 1.1 per cent.

"This is very unusual for this time of the year, when gasoline demand is supposed to pick up", said Carsten Fritsch, oil analyst at Commerzbank AG in Frankfurt, Germany.

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Shipping data compiled by Bloomberg showed, Iraq supplied 1 million barrels a day and those supplies accounted for 23 percent of India's purchases last month, up from an average 19 percent in the previous four months.

"The rebalancing of the market is under way, but at a slower pace, given the changes in fundamentals since December, especially the shift in U.S. supply from an expected contraction to positive growth", OPEC added. Yet the group lowered expectations for non-member Russian Federation, which has been cooperating with Saudi Arabia on production, by 200,000 bpd, or about two-thirds of the original estimate.

Oil inventories have remained high several months into a deal by OPEC producers with non-member nations to reduce supply by 1.8 million bpd.

OPEC production rose more than 336,000 bpd in May from a month earlier to 32.14 MMbpd, according to a monthly report from the group on Tuesday.

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Supply grew by 585,000 bpd last month alone, with the rapid return of USA shale adding to strong gains from Opec's exempt members, Libya and Nigeria. Bloomberg reported that as OPEC met, the group's total production was climbing at a rapid pace, as political crises in Libya and Nigeria finally eased and output came back on line.