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Weakening economic outlook and US production surge, today, overshadowed expected supply cuts by OPEC in the international market. Brent crude futures were down by 0.4%, at $66.55 a barrel. US WTI crude futures lowered 0.2%, to $57.07 a barrel. US crude oil production has seen an almost 25% rise this year, with drillers pumping a record 11.7 million barrels per day.
Oil prices in the international market on Monday rose on the notion that Saudi Arabia will push OPEC to curb supply towards year-end. Benchmark Brent crude oil futures were up 0.8%, at $67.29 per barrel. US WTI crude futures climbed 1.3%, at $57.17 per barrel. OPEC defacto leader, Saudi Arabia will most likely push the cartel to cut the supply by 1 million to 1.4 million bpd to prevent oversupply.
Oil prices managed to climb up on Friday after losing the grip on market almost the whole week. The expectations from OPEC for supply cut supported the prices but record US production pulled it down. US WTI went up by 0.7% and was traded at $56.84 per barrel while, Brent crude rose by 0.7% and was traded at $67.10 per barrel.
Saudi Arabia has to deal with Trump’s criticism after announcing its plan to lower oil production on Monday. In a tweet, President Trump said “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” Energy Minister of Saudi Arabia informed that OPEC and its allies will now reverse half the increase in oil output that was planned initially this year.
The head of the International Energy Agency has said that at next meeting OPEC must decide to increase its production. The Executive Director of IEA said, “If the oil producers care about the health of the growth of the global economy, they should take the steps to further comfort the market.” He has also informed that without the support from OPEC, the global economy will enter into a dangerous stage.
Oil prices dropped today as Saudi Arabia’s OPEC governor remarked that market may become oversupplied, followed by a slump in global equities which clouded the demand outlook. Brent crude futures were down by 0.7%, traded at $76.38 a barrel. WTI crude was down by 1%, priced at $66.68 per barrel. While Brent is set for a weekly loss of over 4%, WTI is headed for a 3.5% loss this week.
The Russian energy ministry informed that Energy Minister of Russia, Alexander Novak had a discussion on the oil output cap with Bijan Zanganeh, Energy Minister of Iran. This discussion was held during a meeting in Moscow on Monday. Not giving much details, the Russian Ministry said that both the nations talked about the chances of further oil output regulations.
The blow of US sanctions against OPEC’s third largest producer, Iran has put the global market in turmoil. On Monday, Brent crude broke 4 year record to hit the highest till date. Benchmark Brent rose by 0.6% and was traded at $83.27 a barrel, whereas, WTI went up by 0.4% and was traded at $73.57 a barrel. In future, prices are expected to reach a high of $100 per barrel.
Oil prices today climbed on the back of looming US sanctions against Iran and OPEC's reluctance to jump near four-year highs. Brent crude futures LCOc1 were traded 0.3% higher at $81.45/barrel. WTI crude futures CLc1 were priced 0.3% higher at $72.27/barrel. While the fresh wave of US sanctions targeting petroleum sector will probably hit Iran in November, OPEC and Russia have rebuffed all calls to increase supply.
Saudi Arabian Oil Minister has retaliated on the recent accusations thrown by Trump where he blamed OPEC for increasing prices. During the Joint Ministerial Monitoring Committee (JMMC), the oil minister said “I think member countries have responded in a very good way and have opened the taps and provided a lot of supply to offset decreases in Iran, decreases in Venezuela, decreases in Mexico, and markets are quite balanced today."
Addressing current industry issues, Alexander Novak, Russian Energy Minister has allegedly claimed that US is responsible for the turbulence created in the global oil market. Further, he urged the OPEC and non-OPEC producers to cooperate in order to reach stability. The sanctions and the trade wars imposed by some powers will have an impact on the global economy and therefore on the oil market,” he said.
Oil prices fell today as US President Trump insisted OPEC to lower crude prices. International benchmark Brent crude LCOc1 dipped to $78.67 per barrel. US West Texas Intermediate crude CLc1 dropped to $70.16 per barrel. A meeting of OPEC and other oil producing nations in Algeria is on the schedule this Sunday. The cartel will discuss how to allot supply increments to counterbalance the shortage of Iran crude supplies.
On Thursday, US inventories climbed down and the demand of US gasoline decreased substantially. Moreover, OPEC’s decision not to increase output even though Iran’s supply will shrink, has supported the crude market. Following this, oil prices increased for the third time in the week on Thursday. Brent crude went up by 0.3% and was at $79.60 a barrel and WTI climbed up by 0.8% and was at $71.67 a barrel.
If sources were to be believed, the Joint Technical Committee of OPEC and non-OPEC will meet this Sept 17 to decide on the distribution of the agreed boost in oil production. Proposals on how to distribute the increase have come from Iran, Algeria, Russia and Venezuela. Elevation in the oil production was decided in June to ease supply curbs, when the cartel met in Vienna.
With the significant improvement in oil prices, the Energy Minister of Qatar has demanded all the oil-producing countries to increase their investment in the oil and gas sector. Foreseeing the impact of inadequate investment, he said that now is the time to ensure secure oil supplies. According to the minister, setting particular targets can hamper the market growth and hence, he is not in favour of this idea.
Rising supply from the United States and OPEC sent oil prices down today. Benchmark Brent crude oil futures LCOc1 were priced at $77.43 per barrel, declining by 0.3%. US West Texas Intermediate (WTI) crude futures CLc1 were trading down by 0.3%, at $69.62 per barrel. A Reuters’ survey indicated 220,000 bpd rise in OPEC’s crude production for last month. Meanwhile, BHGE reported addition of oil rigs in US.
With the recovery of Libyan production and Iraq’s southern exports creating records, the output of OPEC oil has hit a high of this fiscal year, the analysis of Reuters revealed. The production hiked in the month of August and 32.79 million barrels per day were pumped, which is 220,000 bpd more than the July numbers. The progress got restricted due to the US sanction resulting in halt on Iranian shipments.
Oil markets showed stability on Wednesday supported by the US sanctions. The sanctions have resulted in supply reduction from Iran. At the same time, the market was held by the climbing production rate outside OPEC. International Brent crude increased and was traded at $76 per barrel while US WTI to $68.59 a barrel.