Crude Oil Price Drops from Two-month High over Increased Supply

 
Crude oil price slipped by 1.3 per cent from a two-month high Tuesday as ample global supplies countered strong demand and expectations for another drop in US crude inventories.
The global benchmark, Brent crude, according to Reuters, was down to $52.03 a barrel Tuesday after trading intraday at $52.93, the highest price since May 25 while the US crude was down 1.2 per cent, to $49.57 a barrel.

This is coming as the Managing Director of Nigeria LNG Limited (NLNG), Mr. Tony Attah, has called on engineers in Nigeria’s oil and gas sector to continuously strive to acquire and demonstrate cutting-edge competence, which would enable the country fully harness the vast natural resources and grow the nation’s economy.

US inventory reports due Wednesday are expected to show crude stocks fell by 2.9 million barrels last week, the fifth straight week of declines.
However, production by the Organisation of Petroleum Exporting Countries (OPEC) rose in July, Reuters survey found Monday, despite a deal to cut output. According to the report, the cost output has helped boost US oil futures by more than 16 per cent since the contract dropped below $43 a barrel in late June.

Reuters reported that the global benchmark, Brent crude, was down 1.3 per cent, to $52.03 a barrel. It traded intraday at $52.93, the highest price since May 25 while the US crude was down 1.2 per cent, to $49.57 a barrel.

Gasoline and heating oil crack spreads RBc1-CLc1 HOc1-CLc1 were stronger on Tuesday, in part after Royal Dutch Shell said its Pernis refinery in the Netherlands, Europe’s largest oil refinery, will remain closed through mid-August following a fire incident.
The latest data point on US inventories comes from industry group the American Petroleum Institute (API).

The US government’s official data will be released Wednesday.
On the demand side, forecasters, including the International Energy Agency (IEA) have been raising their estimates, lending prices some support.

BP was upbeat, seeing demand growing by 1.4 to 1.5 million barrels per day (bpd).
“Global demand is looking pretty strong, and prices will firm around the levels seen today,” BP’s Chief Financial Officer Brian Gilvary reportedly told Reuters after the company reported earnings Tuesday.

OPEC, along with Russia and other non-members are reducing output by about 1.8 million bpd from January 1, 2017, until March next year to get rid of excess supply.
OPEC’s adherence to supply cuts has been high but in recent months, production has increased due in part to recovering output in countries exempt from the deal.
Oil output by OPEC rose last month by 90,000 bpd to a 2017 high, a Reuters survey found, led by Libya, one of the exempt producers.

In a related development, the Managing Director of NLNG Limited, Mr. Tony Attah, has called on engineers to build cutting-edge competence, which would enable Nigeria fully harness the vast natural resources and grow the nation’s economy.

Speaking at the Society of Petroleum Engineers (SPE) Young Professionals Workshop in Lagos Tuesday, Attah remarked that the country’s oil and gas industry has been pivotal to the nation’s economic wins in the past five decades and still remains so till date, stressing the need for competent professionals who will sustain and develop the sector.

“It, therefore, becomes imperative for the Society of Petroleum Engineers and similar professional associations to stimulate the availability of enabling facilities to nurture and grow the professionals and the technology which will deliver the dividends from the sector to the nation’s economy,” he said.

He added: “In view of this urgent need to support the development of world-class training structure for engineers, Nigeria LNG Limited spearheaded the improvement of the study of engineering in Nigeria’s top Federal Universities in the six geo-political zones of the country, through its University Support Programme (USP) through which we recently donated buildings and equipment with a total value of $12 million.

“Under the programme, Nigeria LNG built and equipped six Engineering Research laboratories in Ahmadu Bello University, Zaria, University of Ilorin, University of Nigeria, Nsukka, University of Ibadan, University of Port Harcourt and the University of Maiduguri.”