Iran has struggled to raise production above four million barrels per day since the the sanctions were removed, according to the report, which said it is now producing 3.8 million.
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For the upcoming week we are expecting that the price of Brent crude oil will move toward $51.00 after weakness early in the week.
Crude oil prices rebounded and settled for a modestly high level on Tuesday after the dollar drifted below its two-week high. However, Smith said the meeting could thwart those hopes for a production freeze, noting Saudi Arabia’s crude production recently hit a record high.
A limit on production would be positive for the market, Saudi Arabia’s Energy Minister Khalid Al-Falih said in an interview last week, while ruling out an actual cut to output.
“Today is just another economic story that’s fed the dollar’s strength and with the weekly build expected in USA crude, prices are getting a double whammy”, said Tariq Zahir, a trader in WTI timespreads at Tyche Capital Advisors in NY.
This week saw the dollar spike to a three-week high against the yen after Federal Reserve Chair Janet Yellen bolstered expectations that the central bank would raise interest rates soon.
“They’re just putting more oil onto the market”.
Oil rallied about 20 per cent earlier this month, after the Organization of the Petroleum Exporting Countries said it was working with non-OPEC members to reach a production freeze.
It comes as market remain hopeful for OPEC support, with speculation continuing to talk up wishful thinking that the cartel could reach some kind of agreement to ease oversupply at meetings later this month.
West Texas Intermediate (WTI) for October delivery dropped as much as 75 cents to $46.89 a barrel on the New York Mercantile Exchange and was at $46.98 at 1:35 p.m.in Hong Kong. They are having a hard time finding enough sellers willing to cover their positions at these low prices. Back in 2000, the oil price was trading at about $38 a barrel, but rose nearly unchecked for the next eight years as the Chinese economy boomed, reaching a peak of over $150 a barrel in June 2008. China doesn’t provide reliable oil demand statistics, so the broader economic data needs to be used as an indicator of underlying demand.
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The Iraqi government and the Kurdish regional authorities agreed to start talks to resolve a dispute on oil revenue-sharing that is holding back the nation’s crude exports, according to a statement from the Iraqi prime minister’s office.
