All this, plus Opec’s inability to agree a production cap, confirmed in Vienna on Thursday, has led some to conclude that the price of crude oil will soon head back down.
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However, it then rebounded after a US Department of Energy report showed commercial crude inventories sank by 1.4 million barrels last week.
According to Helima Croft at RBC Capital Markets, the mood at the bi-annual gathering was a “lot more upbeat” than the acrimonious last meeting in December.
“I think that verbal interventions are unlikely to play any significant role”, Novak told reporters in Moscow Friday, after meeting with Qatari Energy Minister Mohammed Al Sada. While oil prices declined initially following the meeting, they eventually stabilized after Saudi Arabia signaled it had no reason to flood the market with additional barrels.
“The rate of global stock build has fallen and the elevated stocks will begin to erode from the start of 2017, providing scope for price improvement”, the bank said. Demand also looks healthy.
In Europe, the Stoxx 600 Index finished the day with a gain of almost 0.1% from the previous close.
Actually, the United States price advantage kept on Wednesday, when the American oil was quoted by $0.7 cheaper than the European analog. The International Energy Agency predicts the supply glut, which sparked the vicious price collapse, will shrink dramatically later this year. “This has never happened before”, Bill Farren-Price of Petroleum Policy Intelligence (PPI) told AFP.
Saudi Arabia was pumping at an average of 10.25 million barrels of oil per day (bpd) in May, slightly up from 10.15 million bpd in April, a Reuters survey showed. “This surprises the market and creates all sorts of fluctuations”, he said, answering TASS question about the impact of the recent OPEC meeting on the oil price.
This signalled that there is no “internal dogfight”, Schieldrop said.
Today’s OPEC meeting is unlikely to decide on production ceilings as Iran indicated via a comment by Iran’s oil minister.
This better mood allowed OPEC to finally name a new secretary general.
Saudi Arabia is the only OPEC member-nation having sufficient flexibility for the market balancing. They expect higher demand from China, India and surprisingly, Russia. KEY DRIVERS BEHIND THE SURGE Saudi Arabia’s crude supplies to Japan spiked in April at a time when Japanese refiners had to make up for an expected shortfall in their procurements from Iran and the UAE, coupled with competitive Saudi official selling prices for March loading programs, industry sources said.
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“There is a strong willingness to re-establish OPEC’s credibility, strengthen its voice while also bringing greater stability in the oil market”, said Alexandre Andlauer, head of oil and gas at financial research firm AlphaValue.
