Crude oil futures may fall on rising imports from OPEC
Twenty-one of 47 respondents in the survey, or 45%, predicted that oil futures will drop. Fourteen said prices will rise and 12 expected little change.
The 10 members of OPEC with quotas, all except Iraq, decided last month to raise their output quota by 2 million barrels to 25.5m barrels a day as of July 1, and by a further 500,000 barrels a day on August 1.
Saudi Arabia and Nigeria signalled on Wednesday last that the August increase may be unnecessary. OPEC pumps about a third of the world’s oil.
“Fundamentals are for weaker crude prices this week - I think we could lose a dollar pretty easily,” said Kurt Barrow, an energy consultant at Purvin & Gertz. Violence in Iraq and Saudi Arabia “is the wildcard”, he said.
OPEC will meet in Vienna on July 21, at which time it will be too late to decide on output in August, president of OPEC and Indonesian Energy Minister, Purnomo Yusgiantoro said. The group will only discuss September’s production level, he said.
“Even if OPEC decides against the additional 500,000 barrels, supplies are ample and should remain in pretty good shape for the foreseeable future,” said Marshall Steeves, an analyst with Refco Group in New York.
US crude-oil inventories have jumped 16% since January, reaching 304.9m barrels last week, the highest in almost two years. Supplies in the week ended January 23 were the lowest since September 1975.
A surge in imports left US supplies 8.1% higher last week than a year earlier.
US imports jumped 4% to 10.6m barrels a day and have been above 10m barrels a day for six weeks, the longest on record. The US is the biggest oil importer and consumes about a quarter of global production.
“Imports have been above 10m barrels a day for the past six weeks and are likely to continue at that rate,’ said Tim Evans, senior energy analyst with researcher IFR Markets.
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