Oil prices rise on expectations of more OPEC output cuts

Pump jacks operate at sunset in an oil field in Midland, Texas. (REUTERS/Nick Oxford/File Photo)
Updated 09 August 2019

Oil prices rise on expectations of more OPEC output cuts

  • Saudi Arabia has said it planned to maintain its crude oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories

SEOUL: Oil prices rose on Friday, supported by expectations of more production cuts by OPEC amid fears the US-China trade row could lead to a global slowdown, curbing demand for crude.
International benchmark Brent crude futures, were at $57.61 a barrel by 0009 GMT, up 23 cents, or 0.4%, from their previous settlement.
US West Texas Intermediate (WTI) futures were at $52.79 per barrel, up 25 cents, or 0.5%, from their last close.
Both contracts jumped more than 2% on Thursday to recover from January lows, buoyed by reports that Saudi Arabia, the world’s biggest oil exporter, had called other producers to discuss the recent slide in crude prices.
Oil prices have still lost more than 20% from their peaks reached in April, putting them in bear territory.
Global financial markets were rocked over the past week after US President Donald Trump said he would impose 10% tariffs on Chinese goods starting September and a fall in the Chinese yuan sparked fears of a currency war.
China’s yuan strengthened against the dollar on Thursday, on the back of strong export growth in July.
Saudi Arabia, de facto leader of the Organization of Petroleum Exporting Countries (OPEC), planned to maintain its crude oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories, a Saudi oil official said on Wednesday.
“Saudi’s production in September will also be lower than it is currently. This helped crude oil rebound from its lowest level since January,” ANZ bank said in a note.
The United Arab Emirates also will continue to support actions to balance the oil market, the country’s energy minister Suhail Al-Mazrouei said in a tweet on Thursday.
The minister said the OPEC and non-OPEC ministerial monitoring committee would meet in Abu Dhabi on Sept. 12 to review the oil market.
OPEC and its allies including Russia agreed in July to extend their supply cuts until March 2020 to boost oil prices.


Oil recoups losses as OPEC, US Fed see robust economy

Updated 14 November 2019

Oil recoups losses as OPEC, US Fed see robust economy

  • US-China trade deal will help remove ‘dark cloud’ over oil, says Barkindo

LONDON: Oil prices reversed early losses on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said it saw no signs of global recession and rival US shale oil production could grow by much less than expected in 2020.

Also supporting prices were comments by US Federal Reserve Chair Jerome Powell, who said the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.

Brent crude futures stood roughly flat at around $62 per barrel by 1450 GMT, having fallen by over 1 percent earlier in the day. US West Texas Intermediate crude was at $56 per barrel, up 20 cents or 0.4 percent.

“The baseline outlook remains favorable,” Powell said.

OPEC Secretary-General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident that the US and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.

HIGHLIGHT

  • US oil production likely to grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations.
  • The prospects for ‘US crude exports had turned bleak after shipping rates jumped last month.’

He also said some US companies were now saying US oil production would grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations — reducing the risk of an oil glut next year.

US President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.

“The expectations of an inventory build in the US and uncertainty over the OPEC+ strategy on output cuts and US/China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.

In the US, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

ANZ analysts said the prospects for US crude exports had turned bleak after shipping rates jumped last month.