The latest data comes ahead of the closely-watched meeting of OPEC and non-OPEC producers in Doha, Qatar, on Sunday at which producers are to discuss freezing output levels in a bid to support prices. With many producers within and outside the Organization of Petroleum Exporting Countries looking to increase their production, it remains to be seen whether freeze talks can bring about actual results or are simply a mean to speculate.
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Asked about Saudi’s position on reducing output, Naimi said: “Forget about this topic”, in comments posted on the website of local daily Al-Hayat.
“Nevertheless, hurdles prevail as oversupply persists and inventories remain high”, the cartel cautioned.
USA crude production is forecast to fall by 560,000 barrels per day to 8.04 million barrels in 2017, while U.S. demand would increase by 190,000 bpd, according to the EIA’s short term energy outlook published on Tuesday.
United States benchmark West Texas Intermediate (WTI) for delivery in May finished 41 cents lower at $41.76 a barrel on the New York Mercantile Exchange.
Iran is believed unlikely to join any freeze until its production returns to levels prior to nuclear related sanctions, which were lifted in January.
For example, the above graph shows the drop in crude oil prices in the week after the EIA (U.S. Energy Information Administration) reported higher inventory data on March 23, 2016.
Previously, officials from the kingdom have maintained that it will only cap production if Iran follows suit.
The report came ahead of a crucial meeting between OPEC and non-OPEC countries in Doha on Sunday.
A firmer USA dollar.DXY also pressured oil prices. Many producers have been retrenching sharply, leading to growing expectations of a potentially sharp cutback in global supply that could help balance markets and buoy prices.
“Even with the large build in oil stocks, everyone’s focus is shifting to that summer driving season and with the gasoline drawdown of 4.24 million barrels, I would expect crude oil to continue to rally”, senior market strategist at Chicago-based RJO Futures said on Wednesday.
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Deputy Crown Prince Muhammed Bin Salman, second deputy premier and minister of defense, has said the Kingdom would only freeze output if Iran and other major producers are also on board.
