GLOBAL OIL SUPPLY GROWS AS OPEC OUTPUT CLIMBS DESPITE DEAL
Major oil producers have ramped up their output despite a deal to curb global production, writes The Wall Street Journal’s Christopher Alessi.
On Friday, the International Energy Agency said the global oil supply increased in July for the third consecutive month. Production increased by 520,000 barrels a day in July to 98.16 million barrels a day, up 500,000 barrels on a year earlier.
Despite the ramp up in output, the global oil market is rebalancing said the Paris-based agency that advises governments on energy matters.
Crude output from the Organization of the Petroleum Exporting Countries climbed by 230,000 barrels a day in July to a new 2017 high of 32.84 million barrels a day, despite the oil cartel’s earlier deal to reduce its production.
“The uptick was driven by weaker compliance with a deal to reduce output, as well as a resurgence of production in Libya and Nigeria—two OPEC nations excluded from the cut because their oil industries have been disrupted by civil unrest,” the Journal reports.
Crude futures eased further on Friday after the IEA revised its historical demand figures lower, indicating oil supplies might not be as tight as previously thought.
Brent crude, the global oil benchmark, fell 0.56% to $51.61 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures fell 0.72% to $48.25 a barrel.
BRITISH COLUMBIA VOWS TO BLOCK PIPELINE
The government of British Columbia, Canada’s westernmost province, vowed Thursday to stop construction of Kinder Morgan Inc.’s $5.8 billion project to expand a pipeline, writes Paul Vieira.
The embattled project would triple capacity to 890,000 barrels of crude oil a day on an existing 714-mile pipeline that carries crude from the Alberta oil sands to British Columbia’s Pacific coast.
“The project was viewed as a way to boost sales of crude oil to Asia and reduce reliance on the U.S. market, where Canadian crude sells at a discount to global prices,” writes Mr. Vieira.
“Under new, left-leaning leadership and citing risks to its environment and food supply, the province began to detail its plan to halt the energy project that Prime Minister Justin Trudeau approved late last year. Shares in Kinder Morgan Inc. and its Canadian subsidiary fell on the news but later recouped some losses,” the Journal reports.