Oil rescued from price lows by Libyan supply disruption


Brent for May settlement sank 31 cents to close at US$64.64 a barrel on the London-based ICE Futures Europe exchange.

"We are now only two to four weeks away from when weekly oil inventory data will start to draw again which should be supportive for oil prices", SEB commodities strategist Bjarne Schieldrop said.

Moodys Investors Service today raised its medium-term price band for crude oil to United States dollars 45-65 per barrel from USD 40-60 as continued OPEC-led production restraint and strong global demand growth have contributed to declining global inventories, offsetting rapid increases in USA shale production.

Gasoline stocks fell by 6.3 million barrels last week, compared with analysts' expectations for a 1.2 million-barrel drop.

Iran is pushing for prices at $60 a barrel, where Mr. Zanganeh says USA oil production will remain under control and not flood the market.

But this is what's so interesting - Increased production by USA petroleum companies didn't happen overnight.

US crude stocks rose last week, but refined product inventories fell more than expected, with gasoline demand rising to a seven-month high, the Energy Information Administration said on Wednesday.

Despite this, oil markets remain relatively weak. The result has been a decline in global crude inventories, which has contributed to higher oil prices. The Saudi energy ministry said back in February that oil exports would continue to be below 7 million bpd in March, despite the 400,000-bpd SAMREF refinery shutting down for planned maintenance.

US bank Goldman Sachs said in a note dated March 13 that there was a "potentially large increase in (U.S.) drilling activity in coming weeks".

The U.S. Energy Information Administration report on oil inventories is due to be released on Wednesday at 10:30a.m. EST.

Oil prices settled higher Wednesday (http://www.marketwatch.com/story/oil-prices-nudge-higher-despite-expected-rise-in-us-stockpiles-2018-03-14), getting a boost as gasoline prices rose on the back of a weekly drop in USA supplies of the fuel.

Estimates by the EIA show global supplies will exceed 100 million bpd for the first time in the second quarter of 2018, while demand will only break through that level in the third quarter, implying a slightly oversupplied market.