In an apparent easing of tensions created at the Doha meeting – when Saudi Arabia blocked a freeze deal because Iran wouldn’t participate while it was still restoring exports that had been choked by sanctions – Zanganeh said Friday that all OPEC members now accepted the return of Iran to the market..
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After touching a 13-year low early this year, the price of oil has moved steadily upward to its present level of around US$50 a barrel.
July WTI (West Texas Intermediate) crude oil futures contracts trading on NYMEX (New York Mercantile Exchange) rose by 0.33% and settled at $49.17 per barrel on Thursday, June 2, 2016.
“There is no reason to expect that Saudi Arabia is going to go on a flooding campaign”, Falih said when asked whether Saudi Arabia could accelerate production.
“Both sides have achieved their underlying aims; Iran’s production remains unconstrained and Saudis policy of allowing the market to rebalance through price is still in place”.
The 169th meeting of OPEC was held in Vienna, June 2.
Still, OPEC’s decision to take no action appeared more an illustration of lack of unity, particularly between OPEC rivals Saudi Arabia and Iran, whose deepening struggle for Mideast supremacy has for years been mirrored at oil meetings.
OPEC agreed on Thursday to stick to its policy of unfettered production with ministers united in their optimism that global oil markets are improving. Oil supply disruptions in Canada, Nigeria and Venezuela have improved market sentiment, but there remains approximately 1 billion barrels of excess oil in storage globally, he said.
Perhaps the major issues for OPEC countries, and indeed for the prices is how the market is now flooded with producers.
Al-Falih made it clear that, contrary to public speculation, the kingdom was still engaged with OPEC, wanted to listen to the diverse views of its members and would be flexible in its approach, the person said.
Meanwhile, according to the sources, Saudi Arabia and its Gulf allies had tried to propose a new collective ceiling in an attempt to fix OPEC’s waning importance and end the market-share battle that has sapped prices and cut investment.
The closest OPEC came to operating like a true oil cartel was in the early 1970s. They also deeply understand that they are being hurt as much as US producers by the last 18 months of low energy prices.
“The report shows that the USA production and stockpiling is on the decline”.
“April continued this year’s trend of record gasoline demand thanks to low prices”, said Erica Bowman, API e chief economist.
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On the demand side, despite slowing global growth, the IEA remains confident world oil consumption will keep rising this year, by 1.2m barrels a day or 1.3pc, with a booming India nearly out-pacing a slowing China as the main engine of global demand growth.
