“We will discuss… and then decide” on output, Saudi Arabia’s oil minister Ali al-Naimi told reporters on arrival in Vienna ahead of Friday’s meeting of the 12-nation Organization of the Petroleum Exporting Countries. “We’ll have to see if the EIA data confirms the build”.
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Traders are also watching for the inventory report to be published by the US Government’s Energy Information Administration.
Crude oil prices rose yesterday as the dollar eased slightly, but with Opec widely expected to stick to its output target this week, concern about oversupply remained in focus.
Data from the American Petroleum Institute (API) showed a 1.6-million-barrel rise in U.S. crude inventories last week to 489.9-million barrels. “Saudi Arabia is in no mood to cut output, especially as a collective cut remains elusive amidst rising financial stress among other major OPEC and key non-OPEC members”, analysts from Energy Aspect said in a note on Tuesday.
Russia, which isn’t a member of OPEC, continues to build output as a weakened ruble reduces costs for drilling and the nation’s tax system helps compensate for the lower price. Until the supply glut starts to fall, the demand outlook improves or production disruptions (mainly in the Middle East) intensify, oil prices are likely to maintain their current levels.
On Wednesday, the crude oil prices dropped during early Asian trade mainly due to unexpectedly growing U.
“If we saw selling of the dollar and buying of the euro, it could support oil prices and give us a bit of a rally”, said Ric Spooner, chief market analyst at Sydney’s CMC Markets.
A strengthening dollar makes commodities priced in the USA currency more expensive for users of other currencies, reducing their appeal.
“Quantitative easing programs around the world have pushed up prices of risk assets, so it certainly won’t do potential upside for oil too much harm”, said Brun.
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Teheran will increase its oil output by 500,000 barrels per day immediately after sanctions are lifted and does not need permission to do so, Oil Minister Bijan Namdar Zanganeh said. Imports rose 414,000 barrels a day and refinery-usage rates rose 2.5 percentage points to 94.5 per cent. Supplies at Cushing, Oklahoma, the delivery point for Nymex oil futures, grew by 428,000 barrels.
