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 Export-Import Bank signs reinsurance agreement with the German Export Credit Agency
RIYADH: The Saudi Export-Import Bank has signed a reinsurance agreement with Germany’s official Export Credit Agency, managed by Euler Hermes Aktiengesellschaft, with the aim of enhancing credit risk insurance coverage to meet the needs of local exporters of capital goods and production inputs from the Federal Republic of Germany.
This agreement is part of the bank’s efforts to strengthen partnerships with international export credit agencies, ensuring the safe and sustainable flow of essential raw materials and capital goods, and enhancing the efficiency of export activities by local enterprises, according to the Saudi Press Agency.
The agreement was signed by Saad bin Abdulaziz Al-Khalb, CEO of the Saudi Export-Import Bank, and Edna Schone, board member of Euler Hermes Aktiengesellschaft and head of its Export Credit Agency.
Al-Khalb stated that the reinsurance agreement with ECA represents an important step in expanding credit risk management tools and enabling local exporters to obtain the production inputs and capital goods necessary to grow their businesses with greater confidence.
He noted that cooperation with international export credit agencies reflects the bank’s commitment to developing advanced insurance solutions that contribute to the growth of the Kingdom’s foreign trade, as part of its pivotal role in strengthening the non-oil national economy.
Through this agreement, the Saudi Export-Import Bank continues to support the growth of Saudi non-oil exports and expand its network of international partnerships, in alignment with the goals of Vision 2030 to diversify the national economy and enhance the Kingdom’s position in global trade.
