TODAY.AZ / Business

Oil prices down on world market

23 January 2017 [13:12] - TODAY.AZ

By Azernews


By Nigar Abbasova

Following three sessions of gains oil prices edged down as prospects of rising U.S. production overshadowed optimism over reduction deal.

Brent crude, the international benchmark, stood at $55.42 per barrel, recording a decrease of some 7 cents, while its U.S. counterpart West Texas Intermediate (WTI) crude futures fell 11 cents to $53.11 a barrel, Reuters reported.

U.S. production is still deemed to be a real challenge for the market endangering OPEC plans to keep prices at the range of $50-60 a barrel. U.S. drillers earlier brought the total count up to 551, adding the biggest number of rigs in almost four years, according to Baker Hughes. The production in the country has risen more than 6 percent since mid-2016, standing at the level of late 2014, when strong U.S. crude output contributed to a crash in oil prices.

The first meeting of a committee of OPEC and non-OPEC states set up to monitor the deal provided optimistic sentiment as major producers said shale impact would not influence the situation drastically. Ministers highlighted that any increase in high-cost U.S. shale oil production as a result of rising oil prices would be absorbed by rising oil demand.

With January not yet complete, the Committee discussed how to best monitor compliance, as well as what level of compliance would be acceptable, saying that 1.5 million of almost 1.8 million barrels per day (bpd) had been taken out of the market already.

The cartel aims to provide 100 percent compliance from all 24 signatories of the historic deal, showing that the group is serious about tackling the supply glut and lifting oil prices.

The group is expected to meet in May to decide whether to propose an extension to the deal which was agreed by OPEC in tandem with other major producers becoming the first such move in almost 15 years.

URL: http://www.today.az/news/business/157957.html

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