Published: Mon, October 24, 2016
Economy | By Melissa Porter

World Bank Boosts 2017 Crude Oil Forecast To $55 Per Barrel

The front-month in U.S. West Texas Intermediate (WTI) crude oil, which expires at Thursday's settlement, was down $1.17, or 2.3 percent, at $50.43 per barrel.

"Today we are drifting lower with WTI crude oil finding resistance at $52".

The price of oil jumped nearly 3% on Wednesday to the highest level in more than a year after a report showed a surprising drop in USA stockpiles of crude.

The report said OPEC's ability to affect oil prices is likely to be tested by the expansion of oil supply from unconventional sources, including the USA shale oil industry.

Still, a surprisingly large build of 2.5 million barrels in petrol stocks that contrasted with analysts' expectations for a 1.3 million-barrel drop meant a less rosy outlook for oil for some. Nigeria said it cut the price of every type of crude it sells in an effort to boost its global market share. Overall, weekly imports of crude fell to 6.47 million bpd, the lowest since November 2015.

The EIA said USA crude imports slid by 912,000 barrels per day last week to 6.47 million bpd, the lowest since November 2015, crimping inventories.

Oil losses looked likely to remain limited amid optimism over a planned output cut by major producers.

The settlement price Wednesday was almost double the lows seen earlier this year, when a barrel of crude settled at $26.21 (U.S.) in mid-February.

"This makes it all the harder to understand why OPEC is talking prices up with its current debate about production cuts, and is thus helping precisely those oil producers it would ideally like to force out of the market", Commerzbank analysts wrote.

The collective profit-taking fueled forecasts of a bullish market ahead of OPEC's November 30 meeting, at which the 14-member cartel is expected to cap production to between 32.5 million and 33 million barrels per day.

Beyond the immediate oil market, OANDA's Halley said that "plenty of event risk lurks over the next 24 hours", including Chinese gross domestic product (GDP) figures, due at 0200 GMT. China on Thursday reported another jump in the country's diesel and gasoline exports, refueling supply glut concerns.

At the Oil and Money conference Mohammad Barkindo said "we have embarked on a rebalancing of the market after the crash of 2014".

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