Commerzbank experts have reported rumors emanating from Venezuela under which “six producing countries, including Russia, Iraq and Iran had agreed to a special meeting”, while the Venezuelan minister oil Eulogio del Pino is on tour to convince its partners to act together against the collapse of prices.
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USA commercial oil in storage in January was 36 percent, or 132 million barrels, higher than the US average for January from 2011-2015. U.S. oil production is at an all-time high, even though oil prices crashed from $107 a barrel in June 2014 to only $30 a barrel at present.
Oil prices jumped 8 percent higher on Wednesday, snapping a two-day rout, after investors took advantage of a weaker US dollar and shrugged off data showing an unexpected large surge. One metric for this is the difference in contract prices between the front month (the most proximate future month) and the contract for one year out, known as the 13th-to-1st month spread, as shown in the graphic below. With oil revenue comprising over 90 percent of the national budget, Iraqi civil services continue to crumble; insufficient before the rise of the Islamic State, the impacts of terrorism, sectarian violence and civil unrest have further eroded vital infrastructure, such as medical care facilities. Futures climbed as much as 4.1 percent earlier as the Bloomberg Dollar Spot Index, which tracks the currency against major peers, declined on signs of a slowing USA economy.
U.S. benchmark West Texas Intermediate (WTI) for delivery in March fell 83 cents to $30.89 a barrel on the New York Mercantile Exchange.
In early trading on Friday, Brent crude was priced above US$35 with WTI more than US$33 a barrel.
At the same time, crude prices remain under pressure from a vast global supply glut. USA supplies rose above 500 million barrels through January 29, the highest level since 1930 in monthly government data compiled by the Energy Information Administration. Analysts had forecast a 1.7 million-barrel gain in gasoline inventories.
It says, according to the Goldman Sachs Group, the global surplus which fueled the more than 70 per cent price drop in the last 18 months, is expected to shift to deficit as US shale output falls.
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While other OPEC members push for oil production restrictions, Saudi Arabia refuses to capitulate, fearing a loss in market value.
