On Monday, oil prices fell in early trading as Iran promised to increase output and rig reductions halted in the United States, then crude futures trimmed losses on data displaying a stockpile drawdown in the U.S. delivery hub. Oil dropped $1 per barrel or more during Monday morning’s trading session, the day following the Mehr news reported that Iran’s Deputy Oil Minister Rokneddin Javadi stated the country’s crude exports, not including gas condensates, would hit 2.2 million bpd towards the midpoint of summer from 2 million barrels per day currently. This past Friday, an industry report displayed the amount of oil rigs operated by U.S. drillers remained stable for the first time in 2016, after a near two-year drop in the count.
Oil cut losses after a report displayed a stockpile drawdown at the Cushing, Oklahoma delivery hub for U.S WTI futures. Market intelligence firm Genscape announced a decline in inventory of 978,862 barrels in Cushing last week, traders who viewed the report noted. Next, WTI’s front month fell $0.30 at $48.11 per barrel on Monday morning, after falling to a session low at $47.40. Brent’s front month declined $0.52 at $48.20, off the day’s lows of $47.58. “Upward price momentum appears to be slowing as we feel that this late winter/spring bull move is in a very advanced stage with only about $3 to $4 a barrel remaining on the upside in referencing either WTI or Brent futures,” quoted Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates.
Also, fading U.S. production and supply outages from Libya to Venezuela and Canada have lifted oil prices almost 80% from 12-year lows reported this winter of around $27 for Brent and $26 for WTI. Though, prices still are hovering less than half the levels seen in 2014, when crude traded higher than $100. According to Goldman Sachs in a research report it anticipates U.S. shale crude productivity advances through 2020, which will drive average break-evens for shale plays to under $50 per barrel for U.S. crude. Lastly, it increased its average Brent expectations to $45 per barrel in 2016, from $39, while it stated West Texas Intermediate would average $45 per barrel this year, increased from $38 prior.