Over the last four weeks, crude oil imports averaged over 8.4 million barrels per day, an 11.3 percent increase compared to the same four-week period previous year. In China, Beijing is pushing local governments to cut steel overcapacity.
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Bulk of the recent price uptick is being attributed to the possibility of OPEC and non-OPEC oil producers working towards a crude production freeze at an informal meeting in Algeria in September. San Francisco Fed President John Williams said Monday the Fed should consider setting higher inflation targets.
Russia’s energy ministry on Tuesday said it was making plans for a possible meeting with the Organization of Petroleum Exporting Countries (OPEC) in October, as the sector grapples with lower crude prices due to a global supply glut.
“These talks keep resurfacing every few months”, Amrita Sen, chief oil analyst at Energy Aspects Ltd.in London, said in a Bloomberg television interview.
“OPEC cooperation hopes should be treated with caution, as this is shaky ground to base a bull rally on”, the USA bank said.
After three straight weeks of unexpected builds, USA crude stockpiles fell 2.5 million barrels last week, the Energy Information Administration said, surprising analysts who had expected a build of 522,000 barrels.
The North Sea benchmark Brent was hovering around $50 per barrel, while US West Texas Intermediate was trading above $47.
Falls in the USA currency this week is also believed to have contributed to the rising oil prices.
An OPEC only meeting in June also failed to reach an agreement to limit production, and the group’s output has since reached new records.
OPEC will next month hold an informal meeting in Algerian capital Algiers, and this has stoked speculation that the group plus Russian Federation will strike a deal to freeze production having failed to reach a deal back in April.
This means the fundamental picture is mixed, and a failure by OPEC to strike an output deal could see oil prices retreat with or without support from USA dollar weakness.
The Saudis are posturing for tough talks at next month’s meeting of the world’s leading oil producers and its sights are on bitter rival Iran which now pumps 2.1million barrels daily plus another 600,000 barrels of condensate daily.
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The report comes at an inconvenient time for the oil market.
