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Crude moves higher but supply glut concerns persist

Published 24/03/2017, 11:32
© Reuters.  Crude oil gains some ground on Saudi export cut
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Investing.com - U.S. oil prices moved higher on Friday, following news of a decline in Saudi oil exports to the U.S., although concerns over high U.S. production and inventories continued to weigh.

U.S. crude futures for May delivery were up 0.50% at $47.94 a barrel, not far from Wednesday’s four-month low of $47.08.

On the ICE Futures Exchange in London, the May Brent contract advanced 0.40% to trade at $50.75 a barrel, still close to Wednesday’s four-month trough of $49.73.

Crude prices were boosted after Saudi Arabia said its crude exports to the United States in March would fall by around 300,000 barrels per day (bpd) from February, in line with the Organization of the Petroleum Exporting Countries’ agreement to reduce supply.

However, to other major consumer regions, Saudi exports remain high.

But traders were still cautious after the U.S. Energy Information Administration said in its weekly report on Wednesday that crude oil inventories rose by 5.0 million barrels last week to an all-time high of 533.1 million.

Oil prices have dropped this month amid concerns the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.

OPEC and other oil producers including Russia agreed last November to cut output by 1.8 million bpd during the first half of the year in order to reduce global supply.

OPEC's latest monthly report showed global oil stocks in January rose to 278 million barrels above the five-year average.

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