Brent oil slipped to about $71 a barrel on Tuesday, from expectations of higher U.S. inventories and concern about Russia’s willingness to stick with Organisation of Petroleum Exporting Countries (OPEC) supply cuts.
Analysts expect U.S. crude stockpiles to have risen by 1.9 million barrels last week, the fourth straight increase.
“We have already seen these inventories going higher in the last week’s print,” said Naeem Aslam, Chief Market Analyst at TF Global Markets in London.
“The rising inventory data has raised many questions for investors – no one wants to see the oil glut again.”
Brent crude, the global benchmark, was down 12 cents at 71.06 dollars a barrel at 0801 GMT. U.S. West Texas Intermediate (WTI) crude gained six cents to 63.46 dollars.
While OPEC-led supply cuts have boosted Brent by more than 30 per cent this year, gains have been limited by worries that slowing economic growth could weaken demand for fuel.
Last month, total OPEC-14 preliminary crude oil production averaged 30.02 million barrels per day (mb/d), a decrease of 534,000b/d over the previous month. Crude oil output decreased mostly in Saudi Arabia, Venezuela, Iraq, and Iran, while production increased in Libya, Congo and Nigeria. Demand for OPEC crude in 2018 averaged 31.35 million b/d.
According to secondary sources, Nigeria recorded 1.73mb/d, while S&P Global Platts survey puts the nation’s output at 1.84mbpd from 1.88million b/d in February.The reported output is about 0.5mbpd lower than Federal Government key’s assumptions and micro-framework for the 2019 budget based on a projection of 2.3mbpd oil production, oil price benchmark of $60pb and exchange rate of N305 to a dollar.
Meanwhile, The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, has called on members of the Nigerian Association for Energy Economics (NAEE) to come up with economic models for predicting the boom and bust cycle in the global oil and gas Industry.