Crude prices change in different directions
By Sara Israfilbayova
Oil prices steadied on June 28, with U.S. crude pulling back from 3-year highs, but supply remained tight with investors concerned by the prospect of a big fall in crude exports from Iran due to U.S. sanctions.
U.S. light crude was 5 cents lower at $72.71 a barrel, after hitting $73.06 on June 27, its highest since November 2014, while Benchmark Brent was up 5 cents at $77.67, according to Reuters.
The prices are supported by data on the sharpest decline in commodity stocks of oil in the U.S. since 2016, as well as uncertainty about further export supplies from Iran amid American sanctions.
According to the report of the U.S. Energy Department, published on Wednesday, oil reserves in the country fell by 9.89 million barrels last week.
On June 26, the American Petroleum Institute (API), which collects information on a voluntary basis, reported a 9.23 million barrel drop in inventories. Analysts expected a less significant reduction - 3 million barrels.
Moreover, gasoline reserves increased by 1.156 million barrels, and distillate stocks increased by 15,000 barrels.
Noteworthy, OPEC and a group of non-OPEC countries agreed that they would return to 100 percent compliance with previously agreed oil output cuts, after months of underproduction by OPEC countries.
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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Sara Israfilbayova is AzerNews’ staff journalist, follow her on Twitter: @Sara_999Is
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