Declining productivity in one of the premier U.S. shale basins and geopolitical tensions in the Middle East gave a lift to oil prices early Thursday.

The price for Brent crude oil, the global benchmark, was trading above $50 per barrel for the first time in more than a month in early Thursday trading. Crude oil prices have been in rally mode during the last few sessions on signs that some of the supply-side strains that were keeping oil prices in the mid $40 range through June were starting to ease.

The U.S. Energy Information Administration reported that productivity in the Permian shale basin in the southern United States was on pace to decline for the 10th month in a row. The EIA said operators are drilling wells, but not completing them, a process used to prep it for production.

"When operators drill a well but do not complete it, the inventory of drilled but uncompleted wells increases, which tends to lower output per drilling rig," EIA explained. "Oil flows only after a well is completed."

Still, the Permian region is expected to represent about 30 percent of total U.S. crude oil production next year. The EIA said in its lately monthly market report, released last week, that total U.S. crude oil production in 2018 would be about 9.9 million barrels per day, a downward revision of about 100,000 barrels per day from its last estimate.

That follow a report that total commercial stocks in the United States declined more than 10 million barrels last week, suggesting a market rebalancing is under way.

At 9:20 EDT, Brent crude oil was up 0.78 percent to $50.09 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.59 percent to $47.60 per barrel.

A morning market report from London oil broker PVM said there are no guarantees recent trends on petroleum product levels in the United States will continue, and some inventory levels are still in surplus. Next week, parties to a production agreement steered by the Organization of Petroleum Exporting Countries meet to review its impacts.

"It remains to be seen if it means further and deeper cuts in oil output but volatility is guaranteed on Monday when the meeting takes place," analyst Tamas Varga wrote in the report.

Meanwhile, divisions among the governments of many Persian Gulf nations are rattling investor's nerves. Ongoing disputes with Qatar have ensnared several OPEC members and deepened the rifts between Sunni and Shiite nations.

Kuwait, which is predominately Sunni, said Thursday it closed down an Iranian culture mission and asked for a reduction in the number of Iranian diplomats operating at the embassy. The issue, according to the official Kuwait News Agency, is related to terrorism.

The row could complicate discussions next week on the OPEC-led effort to balance the markets.

Tweet

Sucking up spilt oil
Washington DC (SPX) Jul 18, 2017
Spilt crude oil has repeatedly polluted and even destroyed marine ecosystems. An effective measure would be to remove spilt oil slicks by absorption into a separable solid phase. As Indian scientists now report in the journal Angewandte Chemie, congelation of the oil to a rigid gel within impregnated cellulose and scooping the particles out is possible. Marine oil spills are disasters that ... read more

Related Links
All About Oil and Gas News at OilGasDaily.com

Thanks for being here; We need your help. The Space Media Network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceMediaNetwork Contributor $5 Billed Once credit card or paypal		SpaceMediaNetwork Monthly Supporter $5 Billed Monthly paypal only