The USA benchmark, West Texas Intermediate crude, was up 36 cents at US$46.62 a barrel. The stock’s low point in its 52 week range is $34.64 per share, with $61.38 as the 52 week high point – that compares with a last trade of $41.56.
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Brent LCOc1 was up $2.40, or 4.8 percent, at $51.65 a barrel by 12:11 p.m. EDT (1611 GMT), breaking out of the $47-$50 band prices have traded in since early September.
“Since the 1970s this industry has been experiencing sharp fluctuations in prices-up and down-which have impacted investments in the field of oil and energy, and its continuity”, Mr. Naimi said, according to Saudi Press Agency.
Another supportive factor is the weakening greenback, which drives demand by making oil cheaper for buyers who are using other currencies. “If low oil prices prevail – then the correction in oil prices will be much more severe”. I am predicting that oil production will fall more than 1 million barrels per day from the peak before the end of the year. OPEC expects global demand for its crude, under pressure in recent years because of rising supplies from outside the group, to rise to 30.3 million barrels per day in 2016, about 1 million bpd more than in 2015. “Saudi Arabia’s cut in official selling prices is quite meaningful as it indicates that OPEC is still willing to fight for market share”.
On global oil markets, Russian Energy Minister Alexander Novak told reporters in Sochi, Russia, that Russian and Saudi officials planned to meet in late October to discuss energy and other issues.
Oil extended gains in Asia on Monday as a decline in USA drilling pointed to a slowdown in production, but a weak job report in the world’s top economy kept a lid on gains. A report showing a fifth weekly fall in the US oil rig count also underpinned crude prices, although trading was thin with China away on holiday.
OPEC’s el-Badri is right about the lack of new investment and what that will mean for future supply.
Market intelligence firm Genscape reported a modest drop of about 150,000 barrels on the week for inventories at the Cushing, Oklahoma storage hub for USA crude, traders who saw the data said.
“Steeper USA production declines over the near term have created a bid for oil prices”, said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.
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Taking positive cues from overseas market, crude oil futures edged higher by 0.26 per cent to Rs 3,090 per barrel today as speculators enlarged positions.
