After a turbulent nine months, when oil prices sank from $106 per barrel in June 2015 to below $30 in February 2016, investors became more optimistic as the commodity started to rally, providing a welcome boost for beleaguered equity markets.
Advertisement
Saudi Arabia kept its spot as China’s biggest oil supplier for the first seven months this year after pumping record output in July, even as Russian Federation threatens to overtake the kingdom in their contest for sales to the world’s largest energy consumer.
This gave the desert kingdom a 14-percent market share in China’s oil market, eking out 0.4 percent more than Russia’s exports to China, which is still breathing down the Saudis’ necks in this part of the world, exporting an average of 1.02 million bpd in the seven-month period. Iranian Oil Minister Bijan Namdar Zanganeh will attend the talks in Algiers, the oil ministry news service Shana said.
Oil entered a bull market Aug 18, less than three weeks after tumbling into a bear market.
That was before Saudi Energy Minister Khalid al-Falih’s interview with Reuters, in which he said there had been no “discussions of substance yet” on OPEC production levels.
U.S. West Texas Intermediate (WTI) crude futures were at $46.73 a barrel, down 4 cents, after dropping 2.8 percent on Wednesday.
Brent crude futures were up 45 cents, or 0.9 per cent, at $49.50 a barrel by 10:15 a.m. EDT (1415 GMT), after settling down 1.8 per cent on Wednesday. The October contract was down 3.6 percent this week.
With output high, not just from OPEC but also other top producers like Russian Federation, and the demand outlook shaky, analysts said there was little prospect of an end to the glut, which has pulled down crude prices from over $100 a barrel in 2014 to their current sub-$50 levels. “A freeze signifies that everybody is content with where the market is today and they want it to be trending in that direction”, Al-Falih said. The nation is Opec’s biggest member.
Iran said on Friday that it would cooperate with other producers to stabilize oil markets, but added that it expected others to respect its individual rights. “They are coming out verbally, talking about production freezes”.
Advertisement
There is an increasing agreement between Opec, non-Opec producers to move to manage oil production as market forces are not enough to correct prices, Opec’s Secretary-General Mohammed Barkindo told Al Hayat pan-Arab daily on Thursday. The strategy of non-intervention in the market since 2014 will not allow for reaching a fair price, he said.
