Futures for WTI dropped 0.84% to trade at $42.66 per barrel, while Brent futures slipped 0.88% to $44.99 per barrel.
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“Higher oil demand is expected in the 3rd and 4th Quarters”, HE Dr Mohammed Bin Saleh Al-Sada, Qatar’s Minister of Energy and Industry and current OPEC President said, expressing positive sentiments in a brief released from OPEC.
He stated that “higher oil demand is expected in the third and fourth quarters”, leading to higher prices.
The price rise came on the back of renewed calls by some Opec members to freeze production in a bid to rein in output, a demand that non-Opec oil producing giant Russian Federation was quick to dismiss.
Brent crude for October was up 13 cents at $45.52 a barrel by 5:42 a.m. CT (10:42 GMT), after rising $1.12 on August 8.
The Organisation of Petroleum Exporting Countries, OPEC, yesterday said it was confident that the prices of crude oil would rise by next month as against the current low prices at the worldwide market.
“U.S. regular-grade gasoline prices are now at a 16-week low and are expected to continue falling to a monthly average of less than $2 a gallon by the end of the year”, Sieminski said.
A barrel of West Texas Intermediate for September delivery gained $1.22, rising to $43.02 on the New York Mercantile Exchange. Opec members are to have an informal meeting on the sidelines of the International Energy Forum, which groups producers and consumers, in Algeria from September 26-28.
Now, Iran’s production has crept back up to 3.6 million barrels a day, nearly 600,000 barrels a day higher since world powers lifted economic restrictions over the country’s nuclear program in January.
“Even if a freeze were to materialize, it is unlikely to impact physical OPEC supplies”, Seth Kleinman, European head of energy research at Citigroup Inc.in London, said in a report.
If accurate, this would be a vindication of its Saudi-led strategy since 2014 of squeezing non-OPEC suppliers by keeping production at high levels despite low prices.
At the moment oil prices are too low for most OPEC nations need in order to balance their national budgets. This prompted money managers to raise their bets on oil prices falling to a new all-time record.
Speculation of market cooperation between OPEC and other producers also fizzled after disinterest shown by top producer and non-OPEC member Russian Federation, traders said.
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“Nobody seriously thinks that OPEC will come up with anything that will tighten supply”, Michael McCarthy, a chief strategist at CMC Markets in Sydney told Bloomberg News.
