Published: Sat, December 24, 2016
Economy | By Melissa Porter

Petronas to reduce crude oil output by 20000 barrels per day

Petronas to reduce crude oil output by 20000 barrels per day

US West Texas Intermediate crude dropped 5 cents to $52.44 a barrel, after closing the previous session down 81 cents.

Oil prices recovered from an earlier dip, with Brent crude, the global benchmark rising to just over $55 a barrel.

On the production side, both Norway and Libya reported gains in crude oil production, putting pressure on efforts by the Organization of Petroleum Exporting Countries to erase the oversupply.

That has kept oil above $50 a barrel for more days this month than any other since July 2015. Prices fell despite the unexpected fall in U.S. gasoline inventories.

Iran, however, was initially reluctant to reduce oil production, but after Saudi Arabia, the largest oil producer among OPEC members agreed to the conditions, the deal was finally inked last month.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. If the cuts are realized, the rebalancing of the oil market is expected to accelerate, with demand exceeding supply.

World oil prices were down on December 23 due to the strong dollar, while volatility still remains principal tendency on the black gold market.

OPEC and other producers led by Russian Federation have announced cutbacks of nearly 1.8 million barrels per day (bpd) in oil production from January 2017.

The analysts and traders surveyed by The Wall Street Journal had expected crude stocks to go down some 2.3 million barrels.

An expected drop in USA crude stocks helped underpin the market during Asian trading, but analysts said the effect may be short-lived. As the oil price moves higher the supply from the United States are likely to move higher. The contract expires next week.

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