Published: Thu, September 21, 2017
Money | By Oscar Reynolds

Oil markets firm on rising refinery demand, falling United States rig count

Oil markets firm on rising refinery demand, falling United States rig count

U.S. shale production for October is expected to rise by 79,000 barrels per day (bpd) to 6.09 million bpd, the U.S. Energy Information Administration said in a monthly report Monday.Output from the Bakken shale formation is set to rise by 7,900 bpd to 1.06 million bpd, while Eagle Ford oil output is set to fall by 9,000 bpd to 1.27 million bpd, according to the EIA's drilling productivity report.Speculators raised their net long positions in Brent futures and options by 16,962 contracts to 430,699 in the week to September 12, InterContinental Exchange (ICE) data showed, the highest level since March.

On Friday the Organization of the Petroleum Exporting Countries and other producers meet in Vienna to discuss the progress of their deal to limit output.

Iraq´s oil minister Jabbar al-Luaibi said on Teusday that his country´s crude oil production was now at 4.32 million barrels per day (bpd).

Georgi Slavov, the head of research at commodities brokerage Marex Spectron, said he did not expect demand for crude oil to rise significantly in the final quarter of this year, which meant supply would have to be restricted even more tightly.

Prices continue to be supported by last week's report from the International Energy Agency which lifted its 2017 demand outlook.

Oil was up Wednesday ahead of USA production and stockpile data, after Iraq hinted at a possible extension of the current OPEC and non-OPEC production deal. Total volume traded was about 2 per cent above the 100-day average. The more-active November futures contract climbed 95 cents to $50.85.

Brent crude futures (), the benchmark for oil prices outside the United States, were at $55.58 a barrel, down 4 cents but still not far off the nearly five-month high of $55.99 from late last week.

The key level for November WTI traders remains $50.30.

"There's a little bit of something in the report for everyone this week".

USA crude stockpiles rose to 472.8 million barrels last week, while inventories at the crucial trading hub in Cushing, Oklahoma, climbed to the highest since June and crude production increased for a second straight week.

"We have more work to do to get supplies back up to normal so that should be very bullish for crude oil", Phil Flynn, senior market analyst at Price Futures Group in Chicago, said by telephone.

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