Recap: Oil futures opened higher on Thursday, supported by weakness in the dollar and Wednesday's EIA report. Gains were quickly erased as it became apparent U.S. stockpiles remain at session levels despite efforts by OPEC and some non-OPEC producers to peel away at the global supply excess. April WTI settled at $48.75 a barrel, down 11 cents, or 0.23%. Brent for May delivery slipped 7 cents, or 0.14%, to settle at $51.74 a barrel.
April RBOB rose 0.2% to $1.589 per gallon, while April heating oil fell 0.3% to $1.508 a gallon.
Fundamental News: The EIA reported that OPEC's production cuts are finally being felt in the US, as crude imports from three of the group's largest Middle East producers fell in the week ending March 10th. Imports from Saudi Arabia fell by 28% to 1.08 million bpd last week. Deliveries from Iraq fell by 57% while deliveries from Kuwait fell by 72% last week. The declines from the Middle East helped cut total US Gulf imports to 2.69 million bpd.
Iraq's Oil Minister, Jabbar Al-Luaibi, said the country pumped 4.57 million bpd of oil in February and plans to increase its output later in the year, even as the OPEC member reaffirmed its commitment to the group's decision to cut production. The country plans to increase output to 5 million bpd by the end of 2017. Iraq exported 3.87 million bpd from its southern and northern terminals in February.
Egypt aims to resume importing oil products from Saudi Aramco by the end of March or early April. Egypt's Petroleum Minister, Tarek El Molla, said a deal to import crude from Iraq would remain in place as it was not a replacement for Saudi oil shipments which were halted last October. Saudi Arabia agreed in April 2016 to provide Egypt with 700,000 tons of refined oil products per month for five years, though the cargoes stopped arriving in early October.
Russia's Lukoil expects oil prices to remain around $55/barrel in 2017. Lukoil's Chief Executive, Vagit Alekperov, said it would be expedient to extend the deal to crude global oil output. Separately, he stated that Lukoil's oil production was down by 2,500 tons/day by mid-March.
The European Parliament rejected a call to ban Arctic oil and gas exploration on Thursday. Lawmakers voted 414-180 to reject the non-binding motion that called for the European Commission and member states to work with international forums towards a future total ban on the extraction of Arctic oil and gas. The European Parliament did, however, endorse a call to ban oil drilling in the region's icy waters.
RBC sees oil prices rising to about $60/barrel in the fourth quarter.
Fitch's BMI Research said OPEC compliance has been strong and loading data for March suggests the trend will continue as increased field maintenance curbs production and support prices.
Deutsche Bank expects OPEC cuts to be extended until the end of 2018 to prevent a build-up in inventories.
According to International Enterprise Singapore, the country's residual fuels stocks fell by 805,000 barrels to 26.929 million barrels in the week ending March 15th. Singapore's light distillates stocks increased by 335,000 barrels on the week to 14.266 million barrels, while its middle distillates stocks fell by 140,000 barrels to 12.878 million barrels on the week.
Early Market Call - as of 9:00 AM EDT
WTI - Apr $49.08, up 33 cents
RBOB - Apr $1.6070, up 1.29 cents
HO - Apr $1.5153, up 1.10 cents
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