For most of last year, the resurgence of U.S. crude oil production was capping price gains and offset part of the production cuts that Organisation of Petroleum Exporting Countries (OPEC) and its Russia-led non-OPEC partners have been implementing since January last year, report said.
UBS believes global oil production will increase by 1.9 million barrels a day this year, up from growth of 400,000 barrels a day in 2017, while demand grows at 1.4 million barrels, down from 1.6 million barrels last year.
Russian Federation produced an average of almost 11million bpd in 2017, while Saudi Arabia produced about 10 million barrels per day. To put things in perspective, the United States oil production has increased from 8.69 million bpd in November 2016, to nearly 9.78 million bpd at the end of 2017, representing a jump of more than 12% over the past year.
"The "sell" side is assuming an average oil price of $55 per barrel for 2018".
Net U.S. crude imports rose last week by 58,000 barrels per day.
These two realities, both undesirable, were presented for Venezuela in OPEC's latest monthly report, out Thursday. To make matters worse, another year of production cuts would have little effect on oil inventories - which the agency says are still 90 million barrels above OPEC's target.
The upshot? Unless there is a serious supply disruption, $65 a barrel is a "natural ceiling" for the oil price, he reckons.
Venezuela's oil gloom is set to persist this year, with the main question among analysts just how low its production will fall.
But the lack of any bearish short-sellers for either crude or fuels suggests a one-way market has developed - which is normally a harbinger of an upsurge in volatility and a correction ahead.
Iraqi Oil Minister Jabbar Al Luaibi said on Saturday that production curbs have contributed to stability in the market and should remain.
China's oil refining past year rose 5 per cent to a record near 568 million tons, Thursday's data showed, after new units started at China National Offshore Oil Corp's Huizhou facility and PetroChina's Yunnan plant.
On the supply side, OPEC said that the world oil supply was projected to have expanded to an average 57.79 million bpd in 2017.
Official U.S. oil inventory and production data is due on Thursday from the Energy Information Administration (EIA).
USA oil production is set to grow faster than previously expected amid a "volatile" year in 2018, the International Energy Agency (IEA) said today as it revised its figures. China's natural gas demand may advance 10 per cent this year as the government continues to replace coal boilers, the research arm of China National Petroleum Corp. said in its annual market report this week.
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