The price of oil has fallen in recent weeks, and the global benchmark, Brent, was down another 54 cents at $43.51 a barrel after the IEA’s report on Thursday. Fundamentally there is no shift in supply or demand outlooks except for hopes of lower production quotas.
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USA refined products futures, including gasoline RBc1 and distillates, jumped after Motiva Enterprises LLC’s 235,000 barrel per day Convent, Louisiana, refinery was evacuated due to a fire around midday on Thursday.
The minister said an increase in Saudi Arabia’s output to 10.67 million barrels per day in July, a record, was due to seasonal demand during summer and in part to meet higher demand from customers.
Oil has fluctuated after tumbling more than 20 percent into a bear market and closing below $40 a barrel last week for the first time in nearly four months. The vast global inventory by most accounts will take until 2020 to be extinguished. According to the International Energy Agency’s (IEA) recently-released IEA Oil Market Report (OMR) for August, global oil demand growth is expected to slow down in 2017. “The Gulf nations have seen their petrodollar revenues collapse, and one way to revive cash flow is simply to produce more oil”.
The comments by the minister of the world’s top oil exporter triggered fund buying and some short covering, giving a boost to prices, traders and brokers said.
Following Maduro’s televised address, ANZ Bank stated, “Another round of proposed production freeze talks by OPEC failed to excite investors”; meanwhile, Russian Federation this week said while it is was open to negotiations, it does not see any ground for new talks on freezing output.
Crude oil futures surged Thursday, extending this week’s run of volatile trading after Saudi Arabia says an upcoming OPEC meeting may discuss “stabilizing markets” by cutting production.
“This expected diminishing product inventory overhang will lead to a sustained tightening of oil market fundamentals and oil prices should be well above current levels”, they said.
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A crude oil trader informed that prices gained following Organization of the Petroleum Exporting countries (OPEC) determined to hold informal meeting at an energy conference in September 2016 to control crude production.
