Oil futures turned lower by midday in Asia, extending Thursday's pullback in the U.S., as producers there show no sign of slowing output into 2018--underscoring their resiliency and efficiency despite prolonged low prices.
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Quarterly reports from the sector have shown firms announcing "aggressive production targets," said ANZ. It noted EOG Resources Inc. (EOG), Newfield Exploration Co. (NFX), Diamondback Energy Inc. (FANG) and Devon Energy Corp. (DVN) have all said they would raise output even though they are cutting back on capital spending.
That as the market prepares for weekly U.S. oil-rig data due later Friday to gauge the possible pace of future production there.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September was recently down 0.3% at $48.89 a barrel in the Globex electronic session. October Brent crude on London's ICE Futures exchange fell 0.3% to $51.84.
A strong gusher of U.S. oil the past three years has been key to prices slumping since. The government estimates domestic crude output will average 9.3 million barrels a day this year and hit a record of nearly 10 million in 2018.
The stubborn oil glut has dented the national coffers of many oil suppliers. Even Saudi Arabia, the world's largest crude exporter and one of the lowest cost producers, had to adopt austerity measures to counter the effects of low prices.
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This year's production caps led by the Organization of the Petroleum Exporting Countries were the biggest reaction to that. More recently, Saudi Arabia and some smaller producers have started to moderate their exports.
One of the implications of OPEC's moves is the group's exports into China falling. In June, China's intake of Middle Eastern crude accounted for approximately one-third of the country's total oil imports. The figure has been closing to one-half in prior years, said the state-run Xinhua News Agency.
The two-day OPEC meeting next week will include deliberation of to-date compliance levels to the output caps. Cartel members have not always followed through with their pledges in the past, and if the U.S. production continue on a strong upward trend the appeal to ignore to the caps would only get stronger, said analysts.
Among refined products, Nymex September diesel was recently down 0.1% at $1.6372 a gallon, reformulated gasoline blendstock rose 0.1% to $1.6329 and August ICE gasoil slid 1.6% to $484.25 per metric ton.
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(END) Dow Jones Newswires
August 03, 2017 23:19 ET (03:19 GMT)