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Will a shift in Opec and Russian output policy mean $56 Brent?

10 June, 2018, 03:14 | Author: Samuel Sharp
  • Oil prices higher on Venezuela exports concerns

The spread to Brent crude oil has been even more significant rising to $11 per barrel.

In similar fashion, the metal for delivery in July contracts was trading higher by Rs 32, or 0.73 per cent to Rs 4,387 per barrel in 272 lots.

"It's insane and astonishing to see instruction coming from Washington to Saudi to act and replace a shortfall of Iran's export due to their Illegal sanction on Iran and Venezuela", Hossein Kazempour Ardebili, Iran's representative to the Organization of the Petroleum Exporting Countries (OPEC), told Reuters.

Crude oil prices fall U.S. data showed a surprise build in crude and gasoline stockpiles; U.S. WTI -1.2% at $64.74/bbl, Brent -0.6% at $74.89/bbl. The global benchmark crude was US$9.90 above WTI for the same month.

Opec and Russian Federation meet on 22 June to discuss production policy.

But many European companies are already severing ties with Tehran for fear of facing secondary sanctions from the United States, which could mean losing access to the USA dollar clearing system.

Oil prices fell on Friday, reversing early gains as signs of weakening demand in China and surging US output weighed on markets despite support from supply woes in Venezuela and OPEC's production cuts.

"A consensus for higher oil prices and revenues will be the bedrock of every OPEC nation".

The US imported 748,000 bpd from Saudi Arabia in March 2018, having reached a post-1970s peak of more than 2 million bpd during 2003, according to figures from the US Energy Information Administration.

Oil prices then further jumped in May after the USA withdrew from the Iran nuclear deal and re-imposed sanctions on Iran that will kick in later this year.

"The continuing increase in crude oil production is weighing on the market, and quite significantly compared to this time a year ago", Andrew Lipow, president of Houston-based Lipow Oil Associates. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High!

This followed an unofficial request from the United States asking OPEC's effective leader Saudi Arabia to boost output.

US drillers added one oil rig in the week to June 8, bringing the total count to 862, the highest level since March 2015, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday.

"This seems to be an intervention in OPEC's supply policy ..."

U.S. crude inventories increased by 2.1 million barrels last week, the EIA said, raising the total to 436.6 million barrels.



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