SINGAPORE: Oil prices were mixed on Monday, caught between the downward pull of rising Russian production and US oil drilling activity at its highest since 2015, and upward pressure from strong demand, especially in Asia.
However, analysts expect surging US output to start offsetting efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to withhold production, which have been in place since 2017 and in the first half of this year have pushed up prices significantly.
Brent crude futures, the international benchmark for oil prices, were at $76.50 per barrel at 0215 GMT, up 4 cents from their last close.
But US West Texas Intermediate (WTI) crude futures were down 8 cents at $65.66 a barrel.
Prices were weighed down by another rise in the number of rigs drilling for new oil production in the United States, which crept up by one to reach its highest level since March, 2015 at 862, according to energy services firm Baker Hughes on Friday.
That implies that US crude output, which is already at a record-high of 10.8 million barrels per day (bpd), will also rise further.
“Non-OPEC supply is expected to rise sharply in 2019 led by US shale growth along with Russia, Brazil, Canada and Kazakhstan,” US bank JPMorgan said in its quarterly outlook published on Friday, adding that it was bearish for the oil price outlook going into the second half of the year.
Going into next year, the bank said “oil fundamentals are expected to weaken in 2019 on the back of stronger than expected non-OPEC supply but also potential release of barrels from OPEC as the joint accord between OPEC and non-OPEC is unlikely to stay in place.”
OPEC, together with some non-OPEC producers including Russia started withholding output in 2017 to end a global supply overhang and prop up prices.
OPEC and its partners are due to meet on June 22 at the group’s headquarters in Vienna, Austria, to discuss policy.
Meanwhile, Russian news agency Interfax reported on Saturday that Russia’s oil production, the world’s biggest, had risen to 11.1 million bpd in early June, up from slightly below 11 million bpd in most of May and well above its target production of under 11 million bpd as part of the deal.
Beyond changes in the supply-side, strong demand has been supportive of oil prices.
In top importer China, overseas crude purchases remain above 9 million bpd, despite a recent dip away from records.
And in India, Asia’s no. 2 buyer, May fuel demand rose by 3.4 percent compared with the same month last year, data from the Petroleum Planning and Analysis Cell of the oil ministry showed on Monday.
Oil mixed as rising US, Russia supplies weigh while strong demand provides support
Oil mixed as rising US, Russia supplies weigh while strong demand provides support
Closing Bell: Saudi main index closes in red at 11,167
RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Wednesday, losing 46.43 points, or 0.41 percent, to close at 11,167.54.
The total trading turnover of the benchmark index was SR4.88 billion ($1.30 billion), as 66 of the listed stocks advanced, while 192 retreated.
The MSCI Tadawul Index decreased, down 5.52 points, or 0.37 percent, to close at 1,506.55.
The Kingdom’s parallel market Nomu lost 153.40 points, or 0.65 percent, to close at 23,486.52. This comes as 32 of the listed stocks advanced, while 31 retreated.
The best-performing stock was Tourism Enterprise Co., with its share price surging 9.95 percent to SR14.36.
Other top performers included Mobile Telecommunication Co., Saudi Arabia, which saw its share price rise by 5.32 percent to SR11.48, and Al Masar Al Shamil Education Co., which saw a 4.86 percent increase to SR22.89.
On the downside, Almoosa Health Co. was the day’s weakest performer, with its share price falling 4.81 percent to SR150.40.
Dallah Healthcare Co. fell 3.81 percent to SR113.50, while Saudi Research and Media Group dropped 3.44 percent to SR100.90.
On the corporate front, Arabian Plastic Industrial Co. has signed a non-binding memorandum of understanding with K. K. Nag to explore the establishment of a specialized manufacturing facility for expanded polypropylene products.
According to a Tadawul statement, the agreement sets out initial mutual obligations and rights between the two parties as part of APICO’s broader expansion strategy to increase production capacity and meet rising industrial demand.
The company’s share price rose 1.21 percent to SR43.52 on the parallel market.
