Reuters reported that Saudi Arabia can set a new record of oil production in August. In China, Beijing is pushing local governments to cut steel overcapacity.
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Saudi Arabia is sending signals that it could boost its crude oil supplies in August, even higher than its record 10.67-million barrels a day reached in July, as it gets ready for tough talks in September for a global output freeze pact.
An OPEC meeting in June also failed to reach an agreement to limit production, and the group’s output has since reached new records.
Oil’s rally has extended for a fifth day, helped by a weaker United States dollar and an unexpected drawdown in USA crude and petrol but traders said the runup may not last, pointing to galloping Saudi output and technical factors.
It will be recalled that the price of oil jumped for a third consecutive day at the beginning of the week after some reassurance for the markets that oil’s biggest players were working to stabilise the world’s most important commodity. Prices climbed 9.7 percent the previous three sessions following comments by Saudi Arabia’s energy minister that it’s prepared to discuss stabilizing the market.
Analysts however are sceptical that a freeze in production at current levels would help shore up prices.
Brent crude futures were down 55 cents at $48.68 a barrel at 0840 GMT (2:10 p.m.in India), while US West Texas Intermediate (WTI) crude was at $46.13 a barrel, down 45 cents on the day.
Brent crude settled up 88 cents, or 1.8 per cent, at $49.23 a barrel. At session-highs, the front month contract for US crude hit its highest level since July 12.
Russian Energy Minister Alexander Novak said his country, a non-OPEC member, was working with Saudi to achieve oil market stability – hinting at possible cooperation on production. Gasoline stocks in the USA also dropped by 2.7 million barrels (1.2 percent) to 232.7 million barrels.
OPEC producers will meet in Algeria in September as the global oversupply continues to hit the budgets of most exporters.
The difference is traders have become more sceptical about the success of OPEC’s decision to potentially freeze crude production.
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The index remained relatively unchanged after minutes from the Federal Reserve’s July meeting depicted a fractured committee split on the timing of the US central bank’s next interest rate hike.
