SINGAPORE: Oil prices edged higher on Thursday, supported by lower US inventories, as investors waited for a decision from key producers on whether they would maintain or ease supply cuts in the second half of the year.
Brent crude for September gained 17 cents, 0.2 percent, to $74.79 a barrel by 0355 GMT while the US West Texas Intermediate crude for August was at $73.68 a barrel, up 21 cents, or 0.3 percent, close to its highest since 2018 of $74.45.
WTI rose more than 10 percent in June while Brent added over 8 percent, touching highs since 2018, as summer travel picked up and more people got vaccinated.
Analysts had forecast a wider supply deficit globally in the second half as the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, maintained production cuts while demand rises.
OPEC+ is easing supply cuts between May and July by 2.1 million barrels per day and will meet on Thursday to decide whether to leave production unchanged or boost output, possibly by more than 1 million bpd or by a more modest 0.5 million bpd in August. The group is expected to also discuss whether to extend the supply reduction deal to beyond April 2022.
“Sideline discussions indicate that Russia is proposing to boost supply while Saudi Arabia wants a more cautious approach,” ANZ analysts said in a note.
Analysts at Citi bank said global oil market fundamentals should be robust enough to justify an easing of production cuts, adding that they were factoring a 1 million barrels per day (bpd) surge in OPEC supplies in August.
Even after accounting for higher OPEC+ production, Citi expects the market to remain in a deep deficit of more than 3 million bpd through the third quarter with a high probability of Brent hitting around $85.
However, outbreaks of the Delta virus variant are raising concerns demand recovery may falter. Renewed lockdowns and rising costs have already weakened momentum in Asia’s factory activities in June.
In the United States, crude stockpiles fell last week for the sixth straight week in response to rising demand, data from the Energy Information Administration showed.
A drop in crude inventories at Cushing, Oklahoma, the delivery point for WTI, to the lowest since March 2020 also underpinned the US benchmark, squeezing its discount to Brent
Brent was seen averaging $67.48 a barrel this year and WTI $64.54, both up from forecasts in May, a June Reuters poll showed.
Oil prices nudge higher before OPEC+ meet
https://arab.news/bpyz4
Oil prices nudge higher before OPEC+ meet
- OPEC+ is easing supply cuts between May and July by 2.1 million barrels per day
- WTI rose more than 10 percent in June while Brent added over 8 percent
Saudi Arabia opens 3rd round of Exploration Empowerment Program
RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources, in collaboration with the Ministry of Investment, has opened applications for the third round of the Exploration Empowerment Program, part of ongoing efforts to accelerate mineral exploration in the Kingdom, reduce early-stage investment risks, and attract high-quality investment from local and international mining companies.
The third round of the Exploration Empowerment Program offers a comprehensive support package targeting exploration companies and mineral prospecting license holders.
The initiative aims to lower investment risks for projects and support a faster transition from prospecting to development.
"The program provides coverage of up to 70 percent of the total salaries of Saudi technical staff, such as geologists, during the first two years, increasing to 100 percent thereafter, in line with program requirements.
This support aims to develop talent, build national capabilities in mineral exploration, promote job localization, and facilitate the transfer of geological knowledge.
The application for the third round opened on Jan. 14, allowing participants to benefit from the Kingdom’s attractive investment environment, its stable legal framework, and streamlined regulatory structures, as well as integrated infrastructure that supports the transition from mineral resources to operational mines.
The ministry has set the timeline for the third round, with the application period running from Jan. 14 to March 31.
This will be followed by the evaluation, approval, and signing of agreements from April 1 to May 31, with the eligible projects set to be announced between June 1 and July 31 of the same year.
The program stages include submitting exploration data during the reimbursement and payment phase from Sept. 1 to Nov. 30, followed by technical and financial verification of work programs and approval of the disbursement of support funds in January 2027.
The exploration data will then be published on the National Geological Database in April 2027.
The ministry emphasized that the EEP focuses on supporting the exploration of strategically important minerals with national priority. It also contributes to enhancing geological knowledge by providing up-to-date data that meets international standards, helping investors make informed decisions and supporting the growth of national companies and local supply chains.
The ministry urged companies to apply early to benefit from the program’s third round, which coincided with the fifth edition of the International Mining Conference, which was held from Jan. 13 to 15.
