Crude oil futures dipped on Wednesday as the US dollar held around three-week highs and industry stocks data indicated a build in USA crude inventories. “The balances are slightly tighter in Q4 than previously assessed”, Barclays bank said on Wednesday. This is after Saudi Arabia’s energy minister Khalid Al-Falih stated in the week prior that he does not trust any “significant intervention” in the oil market is needed. Iraq produced an impressive 4.6-4.7 million barrels per day in July, up more than 1 million barrels per day from its 2015 average.
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October Brent crude LCOV6, +0.24% on London’s ICE Futures exchange rose $0.09 to $49.35 a barrel.
Iran’s plan to keep boosting crude production until it regains its OPEC market share is dimming prospects of collective action by major producers to freeze output, according to Patrick Allman-Ward, chief executive officer of Dana Gas PJSC.
Crude oil prices rebounded and settled for a modestly high level on Tuesday after the dollar drifted below its two-week high.
US West Texas Intermediate (WTI) crude was up 17c at $47.15 a barrel.
“The kingdom’s production policy will maintain a large degree of responsibility”, he said, signalling the kingdom would not flood an oversupplied market if there was no demand for it, a position Saudi Arabia has always said it holds to. A stronger dollar makes commodities denominated in the greenback less affordable for holders of other currencies.
“The product markets that led the crude higher through most of this month have been leading the complex lower during the past week, said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates”.
Crude oil prices ticked higher in early Tuesday trading amid weather concerns in the U.S. Gulf of Mexico and Saudi Arabian pivots toward Asia.
Goldman Sachs said there was a likelihood of recovery from supply disruptions in Nigeria, Iraq and Libya in the second half of this year that could tilt the oil market back into surplus.
Purely in terms of public statements, Iraq’s intentions leading up to the OPEC summit are erratic at best: Al-Abadi was quoted by Reuters on August 23 as saying his country still hadn’t raised production sufficiently, and he urged oil companies to boost output (he had previously instructed them to cut investment).
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Also supporting the oil rally is the report of stockpile data due later in the day. “WTI can easily go to $38, Brent can slip below $40”, Tchilinguirian told the Reuters Global Oil Forum. A freeze deal between members of the Organization of Petroleum Exporting Countries and other producers was proposed in February but a meeting in April ended with no final accord.
