Reuters - Gulf Arab OPEC members led by Saudi Arabia will push for an increase in supplies at a meeting of the oil cartel this week in an effort to support flagging world economic growth by bringing crude prices back below $100 a barrel.
VIENNA (Reuters) - Gulf Arab OPEC members led by Saudi Arabia will push for an increase in supplies at a meeting of the oil cartel this week in an effort to support flagging world economic growth by bringing crude prices back below $100 a barrel.
Gulf Arab OPEC members led by Saudi Arabia will push for an increase in supplies at a meeting of the oil cartel this week in an effort to support flagging world economic growth by bringing crude prices back below $100 a barrel.
What is Saudi Arabia’s bottom line for propping up oil prices unilaterally before it leans on the rest of OPEC to help share the burden?
At $112 a barrel for Brent crude, well above OPEC’s preferred $100, it may not look like a hot issue just yet.
As Ali al-Naimi, oil minister for Saudi Arabia, OPEC’s biggest producer said this week, the oil market is in “the best situation it can be” and at “the right price.”
Oil traders should not lose too much sleep worrying about what OPEC, often unpredictable and quarrelsome in the past, will do when it meets next week.
The producer cartel, say delegates who attend meetings, is odds on to leave output policy unchanged. As a risk factor for oil markets, its May 31 gathering in Vienna barely features on traders’ radar.
Brent crude oil hit a four-week high above US$112 per barrel on Wednesday after the U.S. Congress approved a deal to avert a fiscal crisis, while promising data from top energy consumer China also supported prices.
The United States averted economic calamity when lawmakers approved a deal preventing huge tax hikes and spending cuts that would have pushed the world’s largest economy off the “fiscal cliff” into recession.
Top oil exporter Saudi Arabia told OPEC it reduced its oil output in August by 400,000 barrels per day (bpd), a cutback coinciding with a drop in oil prices towards the kingdom’s preferred level of $100 a barrel.
In a monthly report issued on Wednesday, the Organization of the Petroleum Exporting Countries also cut its forecasts for demand for OPEC crude this year and next, pointing to a supply surplus of more than 1 million bpd in 2015 if OPEC keeps output at current levels.
The Organization of Petroleum Exporting Countries forecast the world will need less of its crude next year, even as global oil demand growth rebounds to its strongest pace since 2010, amid competing supply sources.
Iraq is sharpening a push to sell its swelling crude output and sit at oil’s top table with Saudi Arabia, sweetening terms for contract buyers next year, its customers say.
Iraqi Oil Minister Abdul-Kareem Luaibi held court to oil executives in Vienna’s Hotel Imperial last week on the sidelines of an OPEC meeting. Some buyers have said they were concerned by higher prices and variable quality.
Canadian oil producers raised their output to a record 4.3 million barrels per day in February amid higher global demand, according to the International Energy Agency.
Actual data from last December showed Canadian production had reached an all-time high of 4.2 million bpd, and is now estimated to have reached 4.3 million bpd by February, thanks mostly to higher bitumen, natural gas liquids, and light conventional output, which rose by about 100,000 bpd combined, the IEA said in its March report published Friday.
OPEC’s influence on oil prices is very visible in the short run, but it is less certain that its pricing power can be maintained in the long term, according to a thoughtful review published by Bassam Fattouh and Lavan Mahadeva of the Oxford Institute for Energy Studies.
Fattouh and Mahadeva examine how the cartel’s strategy and power over oil prices have varied over time depending on market conditions and the interaction among OPEC members (“OPEC: What Difference Has it Made?” Jan 2013).