Oil rises on supply losses, US push to isolate Iran

Gladys Abbott
June 30, 2018

August Brent crude, the global benchmark, rose $1.03, or 1.4%, to $75.76 a barrel, poised for the highest finish in almost two weeks.

"OPEC has moved back to a collective quota". They are called on to make honest efforts to comply with the agreement.

USA crude stocks fell almost 10 million barrels last week, the most since September 2016, while gasoline and distillate inventories rose less than expected, the Energy Information Administration said.

Al-Falih said on Sunday after the conclusion of the meeting between the OPEC and its allies that Aramco had the decision to boost output and was already ramping up shipments.

"You have this problem of Venezuela, Angola and a few other producers that are unable to increase production".

The road to 2018 oil prices has been fairly predictable.

Saudi Arabia plans to pump up to 11 million barrels of oil per day (bpd) in July, the highest in its history, up from about 10.8 million bpd in June, an industry source familiar with Saudi oil production plans told Reuters on Tuesday.

Now the strategy has shifted.

The oil-producing countries, including OPEC member nations, need to enhance the workability of a production increase by strengthening their mutual surveillance system. The aim of the organisation is to stabilise oil markets and steady the supply of oil for the public.

The record increase in global crude oil prices last month was feared to drive up demand and throw prices and supply in disequilibrium.

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Stephen Innes of futures brokerage OANDA said the outage had contributed to a major draw in US crude oil inventories.

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Opec and non-Opec partners, including Russian Federation, have since 2017 cut output by 1,8 million barrels per day (bpd) to tighten the market and prop up prices.

To be sure, Trump has publicly complained about OPEC policy and rising oil prices on Twitter.

"Meanwhile, OPEC's Libya's renewed in-fighting cost it 400,000 bpd of production last week and damaged one of its oil ports", said FT.

Bank of America Merrill Lynch (BoAML) said Brent could rise to $90 a barrel by the second quarter of 2019.

"Looks like OPEC is at it again", Trump wrote in mid-April in a post on Twitter.

An oil pump is seen operating in the Permian Basin near Midland.

Thomas Pugh, a commodities economist at the London-based Capital Economics, wrote in a note that OPEC is now producing nearly 1 million bpd below its collective quota; and Saudi Arabia, Kuwait, the United Arab Emirates and Qatar collectively produced about 900,000 bpd less in May than they did in December 2016.

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