Oil ends lower amid growing crude stockpiles
By Gunay Camal
Oil futures finished lower on March 2 as concerns over a record build-up in U.S. stockpiles weighed on the market, with producers boosting shale oil production.
The price of May futures for Brent crude oil has dropped by 0.37 percent to $56.15 per barrel as of 01:38 EST. The price of April futures for West Texas Intermediate (WTI) oil has decreased by 0.46 percent and stood at $53.58 per barrel.
Still, oil remained locked within a tight trading range as strict OPEC compliance with output cuts offset rising U.S. oil reserves.
Crude stockpiles in the United States, the world's top oil consumer, rose by 1.5 million barrels last week, less than forecast, but touching a record at 520.2 million barrels after eight straight weekly builds, according to the Energy Information Administration (EIA).
The U.S. crude oil imports averaged 7.6 million barrels per day last week, up by 303,000 barrels per day from the previous week, according to EIA’s This Week in Petroleum report.
“Over the last four weeks, crude oil imports of the US averaged 8.2 million barrels per day, 5.1 percent above the same four-week period last year,” said the report.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) reduced its oil output for a second month in February, a Reuters survey found, showing the exporter group has boosted already strong compliance to around 94 percent.
Heftier cuts by Saudi Arabia and Angola helped offset weaker compliance by other members that agreed to limit their output.
Compliance by Russia still remains weak. The country pledged to cut its oil output by 300,000 barrels per day in the first half of 2017
Russia’s Energy Minister Alexander Novak earlier said that the volume of oil production in Russia in February will be lower than in January.
The production cut in February will be higher than 117,000 barrels per day in January, RIA Novosti quoted the minister as saying.
Recalling that OPEC and non-OPEC countries, participating in Vienna output cut deal, have reached the compliance level of 86 percent, Novak expressed confidence that the oil producers will fulfill their obligations under this deal.
Meanwhile, Kazakhstan announced that it has over fulfilled its obligations to cut oil output. The country pledged to cut 20,000 barrels per day from November 2016 level since Jan. 1 2017.
"In January, I can say that we have fulfilled and exceeded our obligations… The oil output was reduced by over 30,000 barrels," Sputnik Kazakhstan quoted Kazakh Energy Minister Kanat Bozumbayev as saying.
In tote, producers are looking to cut a total of 1.8 million barrels a day from the market in the first half of 2017, ousting the problem of glut and raising prices.
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