Oil is poised for the biggest monthly advance since April as the global surplus diminishes and OPEC’s planned talks fan speculation it could reach an accord on output.
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Smith said that despite the diffused opinion that OPEC is going through a hard period and becomes obsolete, the organization has not changed over the past 25 years and it faces the same problems and challenges as in early 1990s.
A rise in the dollar makes dollar-priced commodities such as crude more expensive for holders of other currencies, and tends to put downward pressure on oil prices.
Iraq’s State Oil Marketing Organisation (SOMO) plans to hold talks with the Kurdish Regional Government (KRG), possibly next week, about Iraqi oil exported through Turkey, Deputy Oil Minister Fayadh al-Nema said in an interview on Friday evening. While the oil price collapsed to below $30 per barrel at that time, every oil exporter concerned the future of the energy prices.
The comments by Bijan Zangeneh, carried by Iran s official news agency on Tuesday, added to a feeling that an informal OPEC meeting with Russian Federation in September may not result in a deal that would boost prices.
Oil prices settled down more than 1 per cent on Monday, snapping two consecutive days of gains, on renewed concerns about an oil glut, a stronger dollar and expectations that Nigerian rebels will stop hampering that country’s crude output.
“A decision (to freeze output) would be no more than lip service, as Russian Federation and Saudi Arabia are producing near their capacity limit”.
After the market settled, the trade group American Petroleum Institute reported that US crude stockpiles rose 942,000 barrels last week, in line with expectations of analysts polled by Reuters.
Saudi Arabia is the largest, producing 10.43 million a day.
Iran lost its position as OPEC’s second-largest producer after the US and European Union tightened sanctions on its economy in 2012.
Yet doubts of agreement in talks on an output freeze among members of oil cartel Opec continues to weigh on prices.
The price for Brent spiked 2.5 percent in April a year ago after the Saudi Arabian Oil Co., known also as Saudi Aramco, said it was raising its price for Asian buyers in a sign of improving global demand.
Energy experts like Daniel Yergin now believe that oil supply and demand will balance itself out this year. Just don’t expect to wake up in late-September to a world in which OPEC and Russian Federation have reached a credible agreement on a cap.
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Barring Iran and Saudi Arabia, the rest of the nations were in agreement about the need to freeze production during the Doha meeting.
