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Oil prices bounce amid Russia's output cut, Lybia's production shutdown

Oil prices bounce amid Russia's output cut, Lybia's production shutdown

"The decline in oil over the last month or two has been shocking to the market", said Lindsey Bell, investment strategist at CFRA.

North Sea Brent crude lost $2.41, or 4.0 percent, to a low of $57.20, a 14-month low, and last traded around $58.06, down $1.55.

OPEC's output agreement with Russian Federation and Canada's decision to mandate production cuts could create an oil market supply deficit by the second quarter of next year, if top producers stick to the deal, the International Energy Agency said in its monthly Oil Market Report. Our 2019/23 production floater forecast is based on oil trading in this price range over the next five years.

OPEC changed course after prices dropped steeply from a four-year high above $86 a barrel in October on concern that demand was weakening amid adequate supply.

The Energy Information Administration reported Wednesday that domestic crude supplies fell by 1.2 million barrels for the week ended December 7.

Jabari Parker may already be on his way out of Chicago
Boylen has been disappointed with Parker's defensive effort, according to reports. Most players getting paid in such a range are key players for their teams.

OPEC on Wednesday said it replaced a drop in Iranian exports as USA sanctions resumed and lowered the 2019 forecast of demand for its crude, underlining its challenge to prevent a glut building even after last week's decision to trim output.

"The oil market is regaining further ground this morning in the wake of a bullish API report", Stephen Brennock of oil broker PVM said, although he sounded a note of caution. "Opec is no longer the 30 million barrel (per day) group". That can set the stage for prices to climb, especially if there's unexpected, sharp rise in demand for oil, say in the event a major hurricane strikes production facilities or a key port.

The agency's report stands in contrast to OPEC's own monthly oil market report, which was released Wednesday and showed a slight decline in the cartel's November output despite ballooning Saudi production. But some remain bullish yet - Japan's MUFG views Brent and U.S. West Texas Intermediate (WTI) to be "oversold", predicting a "sharp rebound" in coming months, while Societe Generale forecasts Brent at $73 for both 2018 and 2019.

"A cut of 2.5 percent from October levels for all bar Iran, Libya, Venezuela and Qatar looks closer to a 700,000-bpd cut", said Fyfe, although he still sees the agreement as enough to support prices.

On Wednesday, the API reported a massive build of -10.180M million barrels inventories, compared with analysts' expectations for -525K barrels draw. According to PVM, investors have pulled almost $50 billion out of the two major crude oil futures contracts since the latest rout started in October.

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