Saudi Arabia has proposed holding a meeting on the situation on global oil market, head of Russia’s Transneft energy company Nikolay Tokarev said Wednesday following a meeting with Russia’s Energy Ministry. According to a survey by pricing company Platts, U.S. crude stockpiles likely expanded by 3.5 million barrels last week.
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Global benchmark Brent crude lost 72 cents, or 2.4%, to $29.78 a barrel by 0524 GMT after hitting a session low at $29.76 a barrel.
However, the country previously indicated it would consider cutting production if the largest producers outside the cartel did the same. “At the same time, we can not speak so far about the coordination of actions [in oil production and export – TASS] in a practical way”, Peskov said commenting on Iraqi oil minister’s statement that Russian Federation and Saudi Arabia became more flexible in oil production and export coordination.
The options market shows traders are buying up protection against a rise to at least $40 by the end of the year, and speculators have increased their bullish bets on the price through the futures market.
The slump in prices is putting future investment in new oil supply at risk, according to El-Badri.
“Similar quantities of additional oil will also be coming out of Iran in the next few months, meaning that the oversupply on the oil market will be fed from two sides at once”, analysts at Commerzbank said in a note.
With oil prices down -20% so far this year, the panic that is engulfing markets globally is wreaking havoc on oil markets as well.
Indonesia’s OPEC governor said that support among the member Countries for taking steps to prop up crude prices is slim, with only one OPEC country supporting an emergency meeting over the matter.
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Al sada, who holds Opec’s rotating presidency this year, called on oil producers outside the group to assist in reducing the global oil glut, signalling once again that the body won’t make output cuts alone, reported Bloomberg. “But what happened is not what we have hoped for”, Mahdi said. It was almost the largest ever two-day rally, while the renewed selling on Monday added to oil market volatility.
