OPEC and Russian Federation rule out immediate output boost

27 September, 2018, 08:31 | Author: Salvatore Jensen
  • Brent Crude oil price briefly breaks through $80 per barrel

To reflect rising US oil exports, CME Group Inc (CME.O) said on Monday it will launch a WTI Houston crude futures contract in the fourth quarter.

Finger pointing and Trump-bashing came in the wake of the Organization of the Petroleum Exporting Countries (OPEC) deciding over the weekend to risk the wrath of volatile USA president Donald Trump and not boost crude output, contrary to what many analysts and inside sources expected would happen.

Moreover, both Saudi Arabia and Russian Federation ruled out any immediate increase in crude oil production.

Oil is maintaining strong bullish momentum, with daily MA's in full bullish configuration, supporting the advance.

Crude production in Iran fell 150,000 barrels per day last month.

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"I do not influence prices", Saudi Energy Minister Khalid al-Falih said.

In June this year, however, after months of cutting by more than their pact had called for amid involuntary reductions from Venezuela and other producers, they agreed to boost output by returning to 100 percent compliance.

OPEC said that global oil demand is set to increase by 14.5 MMbpd by 2040, to 111.7 MMbpd.

He further said all producers - OPEC and non-OPEC - wanted to keep the price of oil at around $80 per barrel.

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading sharply higher on Monday, shortly before the cash market opening after OPEC held its ground over the weekend and declined to agree to an immediate increase in output despite last week's pressure by President Trump to do so.

But the joint OPEC and non-OPEC ministerial committee known as the JMMC, which meets on Sunday, can still recommend a further increase in output if needed, the sources said. ANZ bank analysts said the markets were increasingly concerned about dwindling (US) inventories.

“The market does not have the supply response for a potential disappearance of 2 million barrels a day in the fourth quarter, ” Jaeggi said in a speech at the S&P Global Platts Asia Pacific Petroleum Conference (APPEC) in Singapore.

Members of the Organisation of the Petroleum Exporting Countries (OPEC) and non-members have confirmed their intention to continue work to strengthen the stability of the world oil markets in light of the agreement reached in 2016.

The meeting ended with no formal agreement on any additional supply boost.

Oil leaped after the world's top producers made a decision to maintain output during a meeting in Algeria at the weekend.

One interesting outtake from the Algiers meeting was change in the Iranian rhetoric.

Iran's representative to Opec, Hossein Kazempour Ardebili, the head of the iranian delegation in Algiers, has indicated that his country continues to honor its "share of production" and said to expect the client countries of Iran "exercise their sovereignty and do not submit to the instructions of (Donald) Trump". Reuters reported on September 5 that Saudi Arabia wants oil to stay between $70 and $80 a barrel to keep a balance between maximizing revenue and keeping a lid on prices until USA congressional elections.


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