LONDON, Sept 24, 2018 (News Wires) - Oil prices jumped more than 2 percent to a four-year high on Monday after Saudi Arabia and Russia ruled out any immediate increase in production despite calls by US President Donald Trump for action to raise global supply.
Benchmark Brent crude hit its highest since November 2014 at $80.94 per barrel, up $2.14 or 2.7 per cent, before easing to around $80.75 by 11:50 GMT. US light crude was $1.25 higher at $72.03.
"This is the oil market's response to the OPEC+ group's refusal to step up its oil production," said Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt.
OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, on Sunday effectively rebuffed a demand from Trump for moves to cool the market.
"I do not influence prices," Saudi Energy Minister Khalid al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost.
Trump said last week that OPEC "must get prices down now!", but Iranian Oil Minister Bijan Zanganeh said on Monday OPEC had not responded positively to Trump's demands.
"It is now increasingly evident, that in the face of producers reluctant to raise output, the market will be confronted with supply gaps in the next three-six months that it will need to resolve through higher oil prices," BNP Paribas oil strategist Harry Tchilinguirian told Reuters Global Oil Forum.
Commodity traders Trafigura and Mercuria said on Monday that Brent could rise to $90 per barrel by Christmas and pass $100 in early 2019, as markets tighten once US sanctions against Iran are fully implemented from November.
JPMorgan said US sanctions on Iran could lead to a loss of 1.5 million barrels per day, while Mercuria warned that as much as 2 million bpd could be knocked out of the market.
The Organization of the Petroleum Exporting Countries as well as top producer Russia has been discussing raising output to counter falling supply from Iran, although no decision has been made public yet.
A source familiar with OPEC discussions told Reuters on Friday that OPEC and other producers have been discussing the possibility of raising output by 500,000 bpd.
"We expect that those OPEC countries with available spare capacity, led by Saudi Arabia, will increase output but not completely offset the drop in Iranian barrels," said Edward Bell, commodity analyst at Emirates NBD bank.
ALGIERS, Sept 23, 2018 (MENA) - Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) Mohammad Sanusi urged continued efforts to maintain the stability of the oil market.
During the 10th Meeting of the Joint OPEC-Non-OPEC Ministerial Committee, the OPEC chief said the courageous efforts exerted by all parties will be decisive for the petroleum industry.
Meanwhile, UAE Minister of Energy and Industry Suhail Mohamed al Mazrouei said "Today, our industry is in a much healthier place than when the historic Algiers Meeting took place on 28 September 2016.
Fundamentals are strong and we have seen a return of a greater degree of balance to the market. OPEC and its non-OPEC partners have demonstrated what can be achieved when working together. I’d like to commend all participating countries for their historic efforts in this regard."
"There is no doubt that this committee has played an important role in contributing to our many successes. Proper monitoring of conditions in the oil market is an essential component of transparent and effective work. The JMMC continues to fulfil its mandate commendably," he said.
"Despite our major achievements towards market stability, we face new uncertainties today. Many of these uncertainties are factors beyond our control; nevertheless, they need to be continuously monitored in order to build on the progress made to date," he added.
"In this regard, I hope we can continue our important discussions on further means of institutionalizing our cooperation. We are only seeing the beginning of all the great things we can accomplish when working together, in the interests of producers, consumers and the global economy," he said.
LONDON, Sept 21, 2018 (News Wires) - Oil prices rose on Friday ahead of a meeting of OPEC and other large crude exporters that will focus on production increases as US sanctions restrict Iranian exports.
OPEC and its allies are scheduled to gather in Algeria on Sunday to discuss how to allocate higher supply to offset the shortage of Iranian supplies.
Brent crude oil was up 85 cents at $79.55 a barrel by 11:40 GMT US light crude was up 55 cents at $70.87.
Brent is close to four-year highs, trading just below $80 a barrel, as investors bet that the Organization of the Petroleum Exporting Countries will be unable to compensate fully for the loss of oil from Iran, OPEC's third-biggest producer.
But the meeting on Sunday is unlikely to be able to change production policy. Such a move would require OPEC to hold what it calls an "extraordinary meeting", which is not on the agenda.
US President Donald Trump increased pressure on OPEC on Thursday, calling on the organisation to "get prices down now!"
"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices," Trump wrote on Twitter.
Trump's criticism was directed primarily at Saudi Arabia, OPEC's biggest producer, after the kingdom said it could tolerate oil prices above $80, at least in the short term, said Commerzbank commodities analyst Carsten Fritsch.
"Saudi Arabia now faces a dilemma," Fritsch said. "Refusing to step up production would mean going against the will of ally Trump, but giving in to Trump´s demand would make it his accomplice, which could see OPEC tested to the limit."
Tanker tracking and industry data show Iranian exports of crude have already begun to decline well before the imposition of new US sanctions on Tehran.
"Iranian crude exports are coming (down) earlier and bigger than expected, at a time seasonal demand is strong. With spare capacity also falling sharply, the market remains exposed to supply-induced price shocks," ANZ Bank analysts said in a note to clients.
LONDON, Sept 18, 2018 - Oil firmed on Tuesday on signs that OPEC would not be prepared to raise output to address shrinking supplies from Iran and as Saudi Arabia signalled it was in no rush to bring prices down.
Brent crude futures were up 98 cents a barrel to $79.03 a barrel at 10:39 GMT, after hitting a high of $79.37.
US West Texas Intermediate (WTI) crude was up 83 cents at $69.74 per barrel, after rising over $1 to $69.95.
Ministers from OPEC and non-OPEC producers meet on Sunday to discuss compliance with output policies. OPEC sources have told Reuters no immediate action was planned and producers would discuss how to share a previously agreed output increase.
Bloomberg reported on Tuesday, citing unnamed Saudi sources, the kingdom was currently comfortable with prices above $80 per barrel, at least for the short-term.
The news agency reported that while the kingdom had no desire to push prices higher than $80 a barrel, it may no longer be possible to avoid it because of tightening supplies amid US sanctions against Iran.
OPEC and industry sources have previously told Reuters the kingdom was keen to keep the lid on prices at $80 per barrel until US congressional elections to avoid coming under any additional pressure from US President Donald Trump.
"It casts doubts on whether Saudi Arabia will increase output to compensate for the loss of Iranian crude once sanctions come into effect," said Carsten Fritsch, an analyst at Commerzbank in Frankfurt.
US sanctions affecting Iran's petroleum sector will come into force from Nov. 4.
Russian Energy Minister Alexander Novak said an oil price between $70 and $80 was temporary and sanctions-driven, adding that the long-term price would stand around $50.
US Energy Secretary Rick Perry said last week in Moscow that he did not foresee any price spikes once sanctions came into effect and was positive about Saudi output.
LONDON, August 7, 2018 (News Wires) - Saudi Arabia and Russia started to raise their oil production several weeks before the formal decision to increase output was taken by OPEC and its allies towards the end of June.
Saudi Arabia increased its production to 10.49 million barrels per day (bpd) in June from 10.03 million in May and 9.87 million bpd in April, according to government data submitted to OPEC.
Russia´s Rosneft also started to raise output from late May, anticipating a relaxation of the supply curbs, according to an investor presentation released with the company´s second-quarter results on Tuesday.
The two largest suppliers within OPEC+ adjusted production first and then invited other members to ratify the decision that had already been taken when OPEC and non-OPEC producers met in Vienna on June 22 and 23.
The sequence of events confirms the locus of decision-making and power has shifted decisively away from OPEC and OPEC+ to Saudi Arabia and Russia.
OPEC has been marginalised as a decision-making group; the oil market has moved into a post-OPEC era where management is undertaken by Riyadh and Moscow with some political input from Washington.
The implication that the decision to increase production was taken and started to be implemented well before the OPEC+ meeting is consistent with movements in hedge fund positioning, spot prices and spreads.
Hedge fund managers began to reduce their bullish position in Brent and WTI crudes and options weeks before the decision was formally taken and announced.
Net long positions in Brent and WTI were cut from a peak of 1.093 billion barrels in mid-April to 790 million barrels by the end of the first week in June, and have changed relatively little since then.
Front-month Brent futures peaked around $80 per barrel on May 22-23 and slid through most of June ahead of the OPEC meeting.
Brent calendar spreads have also been sliding since late April as traders anticipated greater availability of crude in the second half of the year.
The fact that the decision to raise output, and probably by how much, had already been taken helps explain much of what transpired in Vienna.
Iran´s oil minister, who initially appeared to oppose any rise in output, eventually consented to a statement that signalled an increase but without numbers or country allocations.
Because the output increase had already been agreed between Saudi Arabia and Russia, and was in fact underway, Iran had little choice.
The same is true for a number of other OPEC members that opposed an output increase.
The Iranian minister could have refused to agree to the statement, in which the output increase would have continued anyway, or agreed to a consensus statement that omitted contentious allocations.
Unsurprisingly, the minister opted for the latter, since it provided a modicum of face-saving, but it shows the extent to which other members of OPEC now have minimal bargaining power.
DUBAI, August 3, 2018 (News Wires) - Top oil exporter Saudi Arabia pumped around 10.290 million barrels per day of crude in July, two OPEC sources said on Friday, down about 200,000 bpd from a month earlier.
The amount of oil supplied to the market in July was slightly higher at 10.380 million bpd, the sources said.
Supply to the market - domestically and for export - may differ from production depending on the movement of barrels in and out of storage.
Saudi Arabia told the Organization of the Petroleum Exporting Countries that the kingdom pumped 10.488 million bpd of crude oil in June, an increase of 458,000 bpd from the production figure it submitted for May.
However, crude supply to the market in June was higher than wellhead production at 10.579 million bpd, a figure that includes domestic consumption and all exports, including from storage tanks.
OPEC agreed with Russia and other oil-producing allies in June to raise output from July, with Saudi Arabia pledging a "measurable" supply boost.
OPEC and the non-OPEC producers said they would raise supply by returning to 100 percent compliance with previously agreed output cuts, after months of underproduction. That would mean a roughly 1 million bpd increase in output.
Brent oil futures steadied on Friday as the market focused on bearish longer-term factors after gains in the previous session, which were driven by US crude inventories at a major hub falling to their lowest in nearly four years.