US Oil Prices Pull Back Some in Asia

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Gasoline consumption, averaging 9.1 million barrels a day over the past four weeks, is up a healthy 2.5 percent from a year ago.

Russian Energy Minister Alexander Novak said ministers from leading OPEC and non-OPEC producers will discuss the possibility of exiting the deal at a coming committee meeting, but said that "we see that the market surplus is decreasing, but the market is not completely balanced yet".

The 2017 Brent average of $54 was an increase of $10 over 2016 levels, EIA said, with prices increasing fairly steadily throughout the second half of 2017 and year-end prices higher than the annual average, ending the year at a daily price near $67 per barrel, “the highest level since December 2014.”.

The forecast had no impact on the oil market on Tuesday. The average production in 2019 will rise 580,000 bpd to 10.85 million bpd, the agency said in its first outlook for next year.

According to trade press reporting and tanker tracking data, importing diluent for blending with its heavy oil is becoming increasingly hard for Venezuela.

"EIA expects Venezuela's production to continue to fall through the forecast period as the financial situation of the state-owned Petróleos de Venezuela (PDVSA) becomes more precarious", according to EIA/STEO.

The EIA said it expects the share of USA total utility-scale electricity generation from natural gas to rise from 32% in 2017 to 33% in 2018 and to 34% in 2019, as a result of low natural gas prices.

US crude oil prices closed Wednesday at their highest levels in over three years. Two points of particular uncertainty are the US trade enforcement plans against China that Washington is expected to unveil later this month and the direction NAFTA negotiations will take.

-February light, sweet crude on the New York Mercantile Exchange was recently down 0.3% at $63.61 a barrel in the Globex trading session.

Nevertheless, higher oil prices will make investment into US shale oil more attractive. However, the high compliance rate in the latest data includes a sizeable drop in Venezuela's production level of more than 0.2 MMBPD in 2017.

He warned, meanwhile, that oil prices above $60 per barrel could be a spoiler as USA shale oil producers would take advantage of the rally by expanding their exploration and production work.

"Led by USA production, particularly the Permian Basin, and now new oil sands projects in Canada, non-OPEC production is forecast to continue growing through the end of 2019", John Conti, the EIA's acting administrator, said in a statement. Customers buying gasoline at grocery stores and other independent retailers may pay more than those shopping at name-brand outlets after the biggest gasoline pipeline in the US sprung a leak in Alabama on September 9. Natural gas liquids and condensates could be one reason why, despite the recent rally in oil prices, the number of active rigs drilling in North America actually has declined over the past six months.

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