Saudi Arabia’s official press agency on Monday quoted the cabinet in a statement as saying it was ready to cooperate with countries within and outside the Organization of the Petroleum Exporting Countries to maintain the stability of the market.
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The source added that the low price offered by Iraq is a result of its low grade.
The $200 billion holeThe investment reduction has been quite stunning, with well-respected oil-industry research firm Wood Mackenzie projecting that the industry has deferred over 45 major projects since oil prices turned south, representing $200 billion of investment.
“WTI once again came under pressure, dipping below key US$40 before recovering slightly, as USA crude stockpiles continued to increase, keeping inventories over 100 million barrels above the five-year average”, said Bernard Aw, market strategist at IG Markets in Singapore.
On the NY Mercantile Exchange, light, sweet crude futures for delivery in January CLF6, -3.10% traded at $40.67 a barrel, down $1.19, or 2.8%, in the Globex electronic session.
Oil prices rose on Thursday with a few investors keen to buy at what they think are bargain levels, but persistent gluts of crude and refined fuel kept gains limited.
US crude production slipped 3,000 barrels a day to 9.18 million while refineries boosted their operation rate to 90.3 percent, the most since September, according to the Energy Information Administration. “While an increase in Iranian production is not a surprise, it will be a negative when it hits the market”. Analysts say the global glut of crude will likely persist through at least the first half of 2016.
Oil extended its decline amid a broader commodity rout while Venezuela predicted crude prices may drop as low as the mid-$20s a barrel unless Opec takes action to stabilise the market. Oil prices have been continuously falling for over a year while oil producing nations are anxious about a backlash and a potential doom in their local economy. “This would mean that oil prices should be holding steady this week and should mean that supports of $40 and $43 for WTI and Brent January 2016 should hold”.
US crude futures closed moderately higher on Friday, as the count of domestic oil rigs fell slightly last week resuming their trend downward after a brief impasse a week earlier. These producers have made it clear that they feel reducing output would lead to a loss in market share.
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Crude oil staged a handsome recovery in the on-going session, as WTI futures went up by 1% on the bourses.
