Crude palm oil futures fall 0.55% on profit-booking

Crude palm oil futures fall 0.55% on profit-booking

USA crude oil production is forecast to grow by 1.4 Mbd, or 15 percent, this year to the highest annual average ever, and yet OPEC has still succeeded in boosting prices.

Crude oil futures inched lower during mid-morning trade in Asia Wednesday, pressured by a surprise build in USA crude stocks reported by the American Petroleum Institute late Tuesday.

Analysts at Bank of America Merrill Lynch predicted that global oil demand growth would likely grow at a rate of 1.5 million barrel per day this year and 1.3 million barrel per day next in spite of rising prices as all major economies remain in an expansion mode.

Analysts said fresh positions built up by participants in tandem with a firm trend overseas on expectations that supplies will tighten lifted the sentiment here.

A rise in USA government borrowing costs to their highest since 2013 this week has tempered some investor appetite for risk, but analysts said they believed Brent crude may have another attempt at marking new 2018 highs above $75 a barrel.

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The spread, or difference, between Brent crude oil, the global benchmark for the price of oil, and West Texas Intermediate, the USA benchmark, is close to $6 per barrel, with the premium to Brent.

This is unedited, unformatted feed from the Press Trust of India wire.

Oil, which has been rising on speculation of strong global demand, was dented today by profit taking and Iran's resistance to further supply cuts.

The potential of renewed USA sanctions against Iran is also pushing prices higher. The global benchmark crude traded at a $6.17 premium to June WTI, near the widest level since January.

"Oil prices are artificially Very High! No good and will not be accepted!".

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Non-OPEC oil production is forecast to increase by 2.0 million bpd or more this year, mostly as a result of a large increase in USA shale plus other output increases from Canada, Brazil and Norway.

OPEC ministers profess to be unconcerned about the impact on either supply or demand, but they have often misjudged market responses in the past. United States crude rose 3 cents to $68.67, having hit its highest since November 28, 2014 on Tuesday. This analysis is uncertain since U.S. allies are trying to persuade America to continue with the accord and it is unlikely that they would follow the American lead without evidence that Iran had not been honouring the agreement. "The risk of the USA walking away from the Iran nuclear deal may well have increased after Trump replaced his Secretary of State and National Security Adviser with known hawks on Iran, Venezuela, and North Korea".

The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russian Federation have agreed to cap output by about 1.8 million bpd in a deal running from January past year until the end of 2018.

Now, thanks to the massive output drop in Venezuela and the OPEC led production cuts, prices are being driven up.

One of the factors limiting the oil rally is rising USA production.

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Meanwhile, the American Petroleum Institute was said to report USA crude inventories increased by 1.1 MMbbl last week.

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