Oil Mixed on Possible OPEC Production Increase, Higher Crude Stockpiles

Oil Mixed on Possible OPEC Production Increase, Higher Crude Stockpiles

Also supporting prices is the concern about a potential drop in Iranian oil exports following Washington's exit from a nuclear arms control deal with Tehran.

Venezuela is in the midst of a deep crisis and its oil output is at a 70-year low while impending sanctions on Iran can materialize in a supply squeeze of up to 500,000 barrels per day, according to analysts.

In addition, market participants fear that the Organization of countries-exporters of oil (OPEC) can in June to increase production because of the risks associated with Venezuela and Iran. But today I wanted to highlight technical factors rather than fundamentals as the chart of Brent looks quite interesting.

"Recent flow is suggesting short-term traders are looking to sell the $80 per barrel chart-toppers anticipating a possible compliance shift within the OPEC-Non Opec supply agreement", he added in a note on Thursday.

OPEC could raise its oil production at its June meeting over supply worries from Iran and Venezuela, sources told Reuters Wednesday.

Fawad Razaqzada is market analyst at FOREX.com and City Index brands of Gain Capital.

The prospect of renewed sanctions on Iran after Trump pulled out of an global nuclear deal with Tehran has further boosted prices in recent weeks.

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Saudi oil minister Khalid al-Falih had insisted that the higher prices were sentiment-driven, which is to say an exaggerated run up relative to the underlying fundamentals of supply and demand.

"It seems that the market is pausing at current levels".

OPEC and non-OPEC producers, led by Saudi Arabia and Russian Federation, agreed to cut production by 1.8 million barrels per day (MMBPD) until the end of 2018 to lower oil stockpiles and lift oil prices. Commercial US crude inventories C-STK-T-EIA rose by 5.8 million barrels last week, despite expectations that production would decrease by as much as 1.6 million barrels, reports the Energy Information Association.

The government, however, is still exploring its options and has asked for the public's understanding of the fact that rising oil prices are something the government can not control.

While WTI was briefly at $72 US, Canadian oil companies have also seen their prices rise.

Representatives of OPEC and other major oil producers convened May 22 before the group's main meeting next month to review the impact of production cuts.

Crude imports rose 558,000 b/d last week to 8.159 million b/d, while exports dropped 818,000 b/d to 1.748 million b/d.

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