Moody's raises oil price forecast to $45-65 per barrel

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This week, the API reported a smaller build for crude oil, and another draw for gasoline.

Oil rose on Tuesday, after Libya said loadings of crude at a key port had been suspended, offseting an earlier dent to the price caused by evidence of the inexorable growth in USA oil output, Reuters reports.

Crude inventories rose by 2.4 million barrels in the week ended March 2, which was less than the 2.7 million barrel increase analysts had forecast.

Following the release of Wednesday's report, as of 1431 GMT front month West Texas Intermediate futures for next month delivery were lower by 0.09% to $60.70 a barrel.

"This U.S. shale engine is not expected to run out of steam anytime soon, " said Stephen Brennock, analyst at brokerage PVM.

"Oil prices moved lower. after (the) Energy Information Administration published a report that crude production from seven major USA shale plays is expected to see a climb", said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore. That's nearly a 1-million bpd rise in just a bit over two months.

Shale oil - which accounts for the majority of USA supply - is expensive to produce, and is therefore unprofitable when prices are low.

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Recently, a slew of US shale firms predicted higher production this year as oil prices rebound.

US crude inventories rose by 1.2 million barrels in the week to March 9, to 428 million barrels, the American Petroleum Institute said on Tuesday.

"The average monthly increase (in shale output) in the eight months since September is 155,000 bpd".

"Nevertheless, even with crude prices at the higher end of the new $45-$65 range in early 2018, we expect prices to stay within this range over the medium term amid better balance between increased production and growth in demand", Marshall noted.

"Thus OPEC has no scope to expand production from its current level".

At the same time, Moody's maintained its price band for North American natural gas at Henry Hub, the industry's chief measure of natural gas prices, at USD 2.50-3.50 per million British thermal units (MMBtu), while raising the price band for natural gas liquids (NGLs) to USD 20-30 per barrel, up from USD 19-27.