Oil prices surge on weak USA rig count data

27 September, 2017, 00:19 | Author: Gregory Stephens
  • Turkish and Iraqi soldiers walk with Turkish tanks during the exercises in Silopi near the Habur border gate with Iraq southeastern Turkey Tuesday Sept. 26 2017

Also, Issam Almarzooq, Kuwait's Minister of Oil and Minister of Electricity and Water, and Chairman of JMMC, disclosed at the 5th meeting of the JMMC, September 22, 2017, in Vienna, Austria that since its last meeting in July, the oil market situation has markedly improved.

That wasn't the only boost the ministers got ahead of their latest gathering.

When asked if his country would adjust its own output if required, Zanganeh replied that Iran "will consider everything within the framework of our national interest and cooperation with OPEC".

The planned state visit by Saudi Arabia's king to Russian Federation in early October to discuss further cooperation in oil market rebalancing was noteworthy as well, said Goldman's analysts, who pointed out that the two countries were "critical to future supply management".

And there you have it.

This implies that WTI will have to remain in a structural discount to Brent is order to clear rising USA crude supplies. "We have the tap", Erdogan said.

Muscat: Oman crude rose to almost its highest price in two years due to the high compliance by exporting countries with the OPEC production agreement, and also because of an increase in demand from China.

The loss of this supply, combined with the 1.8 million bpd of supply cuts by the Organization of the Petroleum Exporting Countries and non-OPEC producers, has raised concerns of tighter supply. However, the trend has been down and United States oil inventories have declined by ~60 million barrels since the end of March. Good news for Opec then.

Emmanuel Ibe Kachikwu, Nigeria's minister of state for petroleum resources, who led Nigeria's delegation to the meeting, had argued that although Nigeria's production recovery efforts had made some appreciable progress since October a year ago, Nigeria was not yet out of the woods.

But there is a sting in the tail.

Iraq's production in August reached 3.216 million barrels per day. Not everyone agrees. Oil producers have been stepping up hedging activity as 2018 WTI prices rose above US$50 a barrel, according to analysts from Citigroup and BNP Paribas.

An associate professor of the Graduate School of Corporate Management of RANEPA, Ivan Kapitonov, speaking to Vestnik Kavkaza, noted that Brent oil prices are unlikely to exceed $60 per barrel.

So Opec still faces the same problem that it has since oil started to weaken in 2014.

The price of low grade fuel is capped at 186bs per litre to help low income groups, and the government is now working on developing fuel subsidy cards for them. Looked at from another direction, there's a more important question: Has US shale usurped Opec as the global swing producer? Regional resources, he said, are insufficient and the "response capacity is weak". Prices have rebounded since then to over $59.

Following glut in the worldwide crude oil market, OPEC had required its members to cut down on their oil production quota in order to stabilise prices in the global oil market.


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