Please OPEC Please! The Energy Report 06/05/18

Oil prices higher on Venezuela exports concerns

Please OPEC Please! The Energy Report 06/05/18

Trump announced last month that the US would back out of a deal with Iran that sought to curb the country's nuclear ambitions in exchange for sanctions relief.

Analysts said speculators widened positions in tandem with a firm trend overseas where oil prices rose to shake off some of the previous session's losses, supported by plunging exports by OPEC-member Venezuela.

More generally, Brent has been pushed up by the voluntary production cuts put in place a year ago, led by the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation.

EIA also said US crude output hit a record of 10.8 million barrels a day in the week.

Saudi Arabia revealed that although oil prices have increased to over $80 per barrel, the market has yet to recover. Saudi Arabia's crude use can double as oil helps run air conditioners in the desert kingdom.

In announcing his decision, Trump also warned that the USA would impose the "highest level" of sanctions on Tehran.

Reuters reported on May 25 that the producers were considering a supply increase of 1 million bpd, with a final decision to be made at the June 22-23 meeting in Vienna of OPEC and non-OPEC ministers.

OPEC and its allies led by Russian Federation have cut a combined 1.8 million barrels per day of output since January 2017 and the cuts are due to expire at the end of 2018.

This year, fund managers racked up a record bet on a continued rise in oil prices, but the sustained increase in United States shale production, and now the prospect of higher Opec supply, have prompted many investors to pare those positions.

The source said that after receiving Kazempour's request, the UAE's OPEC governor Ahmed al-Kaabi sought the advice of legal counsel. USA oil production is up 1.5 million bpd from a year earlier. The top three producers past year were Russian Federation with daily production of 10.35 million barrels, Saudi Arabia with 9.96 million barrels and the United States with 9.36 million barrels.

"You need to work with your partners in dealing with any potential effect on supply", that OPEC source said. United States crude oil stockpiles were forecast to have fallen for the second consecutive week, a preliminary Reuters poll showed on Monday.

The US imported 748,000 bpd from Saudi Arabia in March 2018, having reached a post-1970s peak of more than 2 million bpd during 2003, according to figures from the US Energy Information Administration.

Crude oil prices are continuing to diverge as worldwide benchmarks rise relative to land locked WTI.

Opec and Russian Federation meet on 22 June to discuss production policy. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High!

Latest News