Oil Steady, More Saudi Supply Seen
From Daily Times
Oil prices were little changed on Wednesday as the prospect of more Saudi supply offset optimism about the global economy that has helped bolster an improved demand outlook.
April Brent crude futures was 4 cents down at $117.48 a barrel by 1155 GMT after posting their first gain in four sessions on Tuesday. US crude added 31 cents to $96.97. The contract expires later on Wednesday.
Saudi Arabia, the world’s top exporter of crude oil, expects to raise its output in the second quarter to satisfy higher demand from China and drive economic recovery elsewhere, oil industry sources said, but the exact rise in volume was unclear. Saudi Arabia’s move to cut output sharply by about 700,000 barrels per day (bpd) in the last two months of 2012 had helped tighten supply and supported oil prices.
Overall the market has stayed in a narrow range between around $115 and $119 since the start of the month, and analysts think there is scope for it to be there for some time. “Crude oil prices have been pushed very high and it would take quite a lot to push them above $120,” said Filip Petersson, Commodity strategist at SEB. Supply is also rising in the United States.
A supply glut in the US Midwest will persist as oil shipments on the Seaway pipeline between the US Midwest and the Gulf Coast will run below daily capacity of 400,000 barrels.
The pipeline was expanded this year as operators had aimed to divert crude from bloated tanks in Cushing, Oklahoma, the delivery point for West Texas Intermediate (WTI).
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