Following the announcement, oil prices rose for the three consecutive days.
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Traders said that dip in oil price was due to profits following a strong rise this month. These remarks were made after last week’s signal from Saudi Arabia to consider the measure of lifting prices following oil futures’ selloff. Many Indian companies too are not very comfortable below 50 dollar per barrel.
The OPEC member said it pumped 10.67 million barrels per day (MMBPD) in July, compared to the previous record of 10.56 MMBPD in June 2015, Kallanish Energy notes.
A barrel of West Texas Intermediate for September delivery rose 84 cents on the New York Mercantile Exchange to close at $46.58 in New York.
Members of the Organization of Petroleum Exporting Countries (OPEC) as well as non-members are scheduled to meet informally in Algeria in September, and Saudi Arabia’s oil minister Khalid al-Falih has hinted that producers could discuss actions to stabilise prices.
Brent crude futures were trading at $48.86 per barrel at 0702 GMT, down 37 cents from their last settlement. After choppy trade on Wednesday following the US Energy Information Administration’s report of a larger-than-expected weekly draw in both crude oil and gasoline stocks, Thursday morning both major oil benchmarks were charging higher.
Saudi Arabia appears to want higher prices, but agreeing a level to freeze supplies will be the main obstacle to a deal.
“Brent has climbed.to US$50 per barrel for the first time since early July, finding support from a weaker U.S. dollar and an unexpectedly marked decline in United States crude oil and gasoline stocks”, said Commerzbank analyst Carsten Fritsch.
Now the sources expect the OPEC heavyweight to raise its crude supplies to another record this month as demand inside and outside the kingdom looks healthy.
Saudi Arabia’s Energy Minister Khalid al-Falih said last Thursday that the country was ready to take “any possible action” to rebalance the oil market, which is now oversupplied.
Analysts said that concerns over oil production in Venezuela were also impacting markets. Gasoline inventories declined by 2.7 million barrels to 232.7 million barrels.
The report comes at an inconvenient time for the oil market.
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Saudi Arabia refused to take part in any freeze unless its rival, Iran, agreed to do so as well.
