The Wall Street Journal reported last week that OPEC countries such as Venezuela, Ecuador and Kuwait want to take another stab at cooperation between the 14-nation Organization of the Petroleum Exporting Countries and non-members such as Russian Federation.
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Total US crude inventories were expected to fall by 1 million barrels in weekly reports, although market intelligence firm Genscape has reported a rise of more than 307,000 barrels at the Cushing, Oklahoma US crude delivery hub, traders said.
Members including Venezuela, Ecuador and Kuwait are now pushing for fresh talks on setting new limits (http://www.wsj.com/articles/opec-members-to-revive-freeze-talks-in-september-1470399142) for oil production in a bid to push prices higher by constricting the amount of oil they release to the market.
OPEC said on Monday it has called an informal meeting of member countries for next month in Algeria to help stabilise the oil market.
The U.S. oil rig count rose last week for a sixth week in a row.
OPEC President Mohammed Bin Saleh Al-Sada reiterated the organisation’s view that oil demand will pick up in the third and fourth quarters of this year. The contract rose $1.22, or 2.9 percent, to close at $43.02 per barrel on Monday.
Some fund managers were pessimistic the OPEC-fueled rally would last. The result was a slight improvement on the previous week, which showed an increase in gasoline stocks as the peak United States holiday driving season draws to a close, sending prices tumbling.
Asian stock markets were little changed Tuesday after Wall Street closed almost flat amid little market-moving news.
In 2017, a further drop to 55.9 million bpd is expected, OPEC said, due in part to further falls in production by U.S. shale oil producers, who need a higher oil price than the current $45-50 to survive. But if you’re looking at another run up to $50 and beyond, I’m not ready to go there.
The run-up had pushed the world benchmark North Sea Brent crude futures from a low below US$28 per barrel in late January to above $52 in early June, but persistently high crude inventories and rising petrol stocks knocked it back below $42 by early August.
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Hedge funds cut their net longs on Brent crude to their lowest since January, whule investors are holding their smallest bullish exposure to USA crude oil since February.
