Oil prices rebound, but IEA view sparks new supply worries By

The Heat: Oil power

It stated: "The transition of the United States to a net energy exporter is fastest in the High Oil Price case, where higher crude oil prices lead to more oil and natural gas production and transition the United States into a net exporter by 2020".

"As a result, prices could be maintained at recent levels even as US production rises", IEA researchers said.

"A driving force behind the next few weeks of pricing vulnerability stems from the current peak in USA refinery maintenance season", Michael Tran, commodity strategist at RBC Capital Markets, wrote in a research note.

Crude inventories in developed nations dwindled by the most in six years in December, even as American shale drillers pumped more oil on to world markets, the International Energy Agency said on Tuesday.

Crude oil futures were slightly lower Tuesday morning amid speculation that USA production will continue to rise.

On Monday, the U.S. Energy Information Administration said shale crude-oil production from seven major U.S. oil regions is expected to see a monthly climb of 110,000 barrels a day in March to 6.756 million barrels a day (https://www.eia.gov/petroleum/drilling/#tabs-summary-2).

Saudi Energy Minister Khalid al-Falih said Wednesday that producers would rather persist with production cuts this year even if that brings about a slight supply shortage.

Meanwhile, in the USA, crude stockpiles probably climbed by 3 MMbbl last week, according to a Bloomberg survey.

Russian Federation has pledged not to abandon a deal with OPEC to keep a lid on oil supplies, even as crude prices rise, OPEC Secretary-General, Mohammed Barkindo told CNBC. The accord ended a record global oil glut after more than two years of low crude prices that overstretched many state budgets. Both benchmarks are about $4 under this same time last week, in what has been an ugly week for oil prices.

In the interim, in the US, crude reserves likely moved by 3 MMbbl a week ago, as indicated by a Bloomberg review.

The private American Petroleum Institute is due to publish crude inventory estimates on Tuesday, while the US government's Energy Information Administration releases fuel storage and crude production data on Wednesday.

Oil prices bounced this afternoon after official United States data showed a lower than expected increase in inventories.

"We believe the sector has transitioned from "sell the rally" to "buy the dip" given the combination of reasonable E&P valuations, institutions being underweight energy, and our expectations of oil inventory draws continuing to support oil prices in 2018 even assuming robust USA oil production growth", the analysts said in a recent research report.

The apparent buoyancy of the global economy was also a factor to watch.

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