Saudi Arabia 'revisiting' policy on oil output cuts, India says

Saudi Arabia 'revisiting' policy on oil output cuts, India says

Meanwhile, West Texas Intermediate gained 46 cents, or 0.71 per cent to United States dollars 65.19 per barrel while Brent crude rose 61 cents, or 0.81 per cent to USD 75.97 per barrel.

While the numbers are in an of themselves a concern to those who worry about another global glut, Andrew Lipow, president of Lipow Oil Associates, pointed out that "The continuing increase in crude oil production is weighing on the market, and quite significantly compared to this time a year ago".

If the partners in the production cut deal decide to raise production and if this move depresses oil prices, Iran and Venezuela will be two of the biggest losers from lower oil revenues, because they can't raise their respective production levels, also because of the USA sanctions.

Brent crude LCOc1 rose 27 cents to $75.65 a barrel by 0412 GMT after dropping to its lowest since May 8 on Tuesday. For the week, Brent was set to fall 0.2 per cent, while US crude was little changed.

OPEC will meet in Vienna on June 22 to decide whether the group and non-OPEC producers, including Russian Federation, should raise output to make up for any supply shortfall from Iran and Venezuela.

OPEC and Russian Federation meet on June 22/23 to discuss production policy.

The Saudi statement in May threatened to undermine a deal between OPEC and its allies led by Russian Federation to curb output by about 1.8 million barrels per day (bpd), starting from January 2017, to reduce a supply glut and boost prices.

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On Friday, Opec's third-largest producer Iran criticised a U.S. request that Saudi Arabia pump more oil to cover a drop in Iranian exports and predicted that Opec would not heed the appeal.

"The Bloomberg story saying the US has requested more oil from some OPEC nations has initiated the price drop", he said.

A market that was in panic due to the loss of Venezuelan output and US President Donald Trump's withdrawal from the JCPOA Iran nuclear deal has just concluded that there is no supply shortage and the shale wildcatters of the Permian Basin, Marcellus and the Bakken ensure that US output will continue to rise. The increase shows that lack of supply that is coming from OPEC crude relative to supply from US production.

The WTI Crude Oil market initially tried to rally during the trading session on Wednesday only to find resistance at the $66 level and start falling again.

Before it slapped penalties on Iran, the US unofficially asked Saudi Arabia and other OPEC producers to increase oil production to try to curb price increases, Reuters reported. Significant volumes of crude oil were also exported to Europe, which increased its imports from OPEC member countries from 4.40 mb/d in 2016 to 4.64 mb/d in 2017.

The group meets in Vienna on June 22 to discuss its supply policy.

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