Oil prices rise after Saudi remarks

02 March, 2018, 04:55 | Author: Salvatore Jensen
  • WTI Crude Oil

'OPEC's level of compliance (with agreed production curbs) and the pace of USA shale's output growth are likely to be the key fundamental price drivers in 2018, ' Ashley Petersen of Stratas Advisors said.

OPEC and non-OPEC producers agreed to voluntary output cuts at the end of 2016.

This represents a significant hardening of OPEC's policy and has partially reversed the recent slide in benchmark Brent prices, which was probably the intention.

"There is ongoing pressure, largely coming from a stronger U".

A Bloomberg survey showed U.S. crude inventories probably increased by three million barrels last week.

Arab News quoted Mazrouei as saying that cooperation between oil producers including Russian Federation had reached levels that were "more than expected".

"We've got a lot more oil to produce and we'll be through that 11 million barrel-per-day threshold much sooner than expected", said Streible. Not only does LOOP mean that more volume can be moved, but using larger but fewer tankers could also cut transit costs, adding to the appeal of American crude.

Oil price gains were again capped by strong United States production and rising exports.

These upticks were supported by comments from Saudi Energy Minister Khalid al-Falih, who announced on Saturday (February 24) that the country's crude production from January to March will be well below output caps, with exports averaging less than 7 million barrels per day. Oil prices, which fell below $30 a barrel in 2016, have since more than doubled to nearly $70 a barrel.

He said that "What we discussed was that price of crude oil is such that it does not result in a loss to producers and at the same time protects consuming nation's interest".

But there's one thing that mainstream seems to be getting wrong. However, there's even more oil, and more supply is expected ahead. It is a sort of self-limiting phenomenon: the wide price differential led to a surge in exports, which helped eliminate the huge price difference, which in turn could put a ceiling on exports.

Prices resumed their downward path after that report, in which the EIA also revised its November crude production figures upward to a record 10.057 million bpd. Plus, surging upstream production doesn't hurt.

Al-Falih's implication that the market could easily go south again is timely given surprising news out of the United Kingdom that for all the talk about aging oil fields, that nation is about to become a net crude oil exporter for the first time in 14 years.



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