Supply rise hits price

Gladys Abbott
June 17, 2018

The group is also contending with internal differences: Saudi Arabia favors easing output curbs implemented a year ago after they succeeded in shrinking a global glut, while Iran, Iraq and Venezuela oppose boosting production.

Although Saudi Arabia has benefited from oil's rally over the last two years, the government relies on a strong security relationship with the US, giving Washington some influence in the debate over OPEC policy.

Saudi production rose to 10.03 million barrels per day in May, in line with deal quotas, according to OPEC data.

The meeting with the envoys and the talks with China, thus, laid the ground for Pradhan to forcefully convey India's message to OPEC energy ministers at the two-day OPEC International Seminar in Vienna next week.

Russia, alongside Saudi Arabia, has the highest spare capacity to boost production.

The Organization of Petroleum Exporting Countries and its allies will meet next week in Vienna at what's likely to be a contentious summit.

The price of West Texas Intermediate crude oil is now $66.60 a barrel.

U.S. President Donald Trump and Iran exchanged sharp words over oil prices, with Trump blaming OPEC for high oil prices and Tehran accusing him of stoking volatility after he withdrew last month from a global nuclear arms deal with Iran. The contract climbed 28 cents to $66.64 on Wednesday.

More news: Antarctic Ice Sheet Is Melting Way Faster Than Expected, Scientists Warn

But the US request and a Trump tweet in April that blamed OPEC for high oil prices has caused a split within the oil group, with some members accusing Saudi Arabia of being too eager to do Trump's bidding.

"The market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption", the IEA said in its monthly report.

Rising US stocks are in part a result of the surge in US crude oil production, which has jumped by nearly a third in the last two years to a record 10.8 million barrels per day (bpd).

Saudi Arabia has floated several oil output hike plans to fellow OPEC members, including one with a two-step increase, as the kingdom seeks ways to narrow differences with Russian Federation and the rest of the cartel, according to people briefed on the discussions.

Saudi Arabian Crown Prince Mohammed bin Salman and President Vladimir Putin are meeting in Moscow tomorrow to discuss oil policy on the sidelines of the opening match of the FIFA World Cup.

OPEC ministers meet June 22 for a regular meeting to consider what happens next with their effort to stabilize the market.

This will help push non-OPEC oil supply growth to 2 mb/d in the second half of the year, OPEC said.

USA crude stockpiles fell by 4.1 million. Trump tweeted in April. Another idea would see an immediate increase of 500,000 barrels, followed by a similar rise in the fourth quarter. "My opinion is the world of energy requires longer periods of stability, both on the oil price side and in the relationship between members and non-members of OPEC, before any major decisions on oil cuts can be taken", she said.

Other reports by LeisureTravelAid

Discuss This Article

FOLLOW OUR NEWSPAPER