Nigeria's excess oil revenue rises to N610m per day

Vladimir Smirnov  TASS

The supply cut helped boost crude prices above $58 a barrel in January, but prices have since slipped back to around $54, as the effort to clear a supply glut has taken longer than expected. And U.S. suppliers aren't just capable of seizing the opportunity for a rebound, they're chomping at the bit-low oil prices have put a significant dent in the shale boom, and there's already a backlog (or "fracklog") of drilled but not yet completed wells just waiting for the economics to change.

Despite this, oil prices rose by around 0.8 percent. As I have written before, the IEA is notorious for underestimating demand and had to once again raise their forecast.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for October delivery traded up about 1.1% at around $48.74 a barrel, and it traded at $47.78 shortly after the report's release. Production rose 0.5% month-over-month but fell 2.8% year-over-year.

Oil prices rose on Tuesday after OPEC forecast higher demand in 2018 and Russian Federation and Venezuela confirmed their commitment to a production-cutting deal in an effort to reduce the global crude glut.

But in August, for the first time in four months, OPEC finally managed to follow through on its promises when its production fell from the previous month's totals. Meanwhile, U.S. gasoline inventories tumbled the most on record last week as refineries in Texas are still recovering from Hurricane Harvey.

The United States Oil ETF (NYSEMKT: USO) traded up about 0.6%, at $9.93 in a 52-week range of $8.65 to $12.00.

In its closely watched monthly report, the Paris-based IEA said the market is starting to tighten due to robust demand and a drop in output from both the Organization of the Petroleum Exporting Countries and other producers. Nigeria has offset the drop by touching a 1.86 million barrels a day by 138,000 barrels.

OPEC Secretary General Mohammad Barkindo listens during a news conference after a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, November 30, 2016. The multi-national agency has revised its 2017 growth estimates upwards to 1.6 million barrels per day.

Mexico produced 170,000 barrels per day, while it had to produce 100,000 barrels.

Data from the U.S. Energy Information Administration Wednesday showed that domestic crude supplies climbed by 5.9 million barrels for the week ended September 8.

Saudi Arabia has energy-reliant economy continues to struggle since oil prices tanked in 2014.

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