Oil slumps as Saudi Arabia, Russia consider reviving output

31 May, 2018, 22:05 | Author: Sally Reid
  • Hedge funds trimmed their net-long position—the difference between bets on a price increase and wagers on a drop—in Brent crude by the most in almost a year

Venezuela's oil output has taken a sharp turn lower in recent years, with the country facing an economic crisis of chronic food shortages and spiking inflation. The rise in crude oil prices compounds the effect of higher duties on palm oil, which is used in some food products. The company, after cutting Saudi imports, has bought a record 16 million barrels (533,000 bpd) of US crude, to load in June, two sources with knowledge of the matter said. The sell-off only serves as proof that traders are having an issue with crude oil supply.

At a time when petrol and diesel prices have hit record high, an analysis based on data compiled from various online sources reveals that petrol and diesel prices in India are not only the highest in this region but also fourth highest among the top 10 crude oil consuming nations in the world.

However, if USA crude exports to Asia do surge to more than 1 million bpd in coming months, this could provide the Saudis and the Russians with an added incentive to make more oil available to the market, and at a more competitive price.

With Brent topping $80 a barrel, and US Crude hitting levels not seen since November 2014, it seemed inevitable a pullback in oil prices was likely.

It's a view endorsed by Helima Croft, global head of commodity strategy at RBC Capital Markets, who pointed out that regardless of the quid pro quo, "the Saudis have higher revenue needs, so I think its going to be a fine line". Many had thought that oil could go as low as $20 a barrel.

Energy ministers from Saudi Arabia, the United Arab Emirates and Kuwait plan to meet on Saturday to discuss OPEC matters, according to people with direct knowledge of the matter. Last week there was a strike by Brazilian truckers over high diesel prices.

Warriors falter late, trail series 3-2 vs. Rockets
He just competes and plays. "Both teams are playing their guys heavy minutes so shots will fall or not", James Harden said. Houston struggled to keep pace throughout the game, shooting just 40 per cent from the field and committing 19 turnovers.

"The moment is coming when we should consider assessing ways to exit the deal very seriously and gradually ease quotas on output cuts", Novak said in televised comments.

The problem with set-piece meetings like the OPEC gathering on June 22 in Vienna is that they focus tremendously on what is said, rather than what is actually done.

"The government is aware of the country's vulnerabilities to abrupt changes in the worldwide oil situation and impending threats on the same, hence we are formulating various strategies to address those vulnerabilities to cushion the impact for our consumers", Cusi said on Monday.

"Tight (shale) oil's been eating OPEC's lunch for the last few years". Last week provided the flawless opportunity for a cool off, with an unexpected United States inventory build of 5.778M barrels and talk of increasing production by Russian Federation and Saudi Arabia.

Meanwhile, traders were likely keenly aware of USA oil production, which shows no signs of slowing down.

The fall in prices of oil for drivers has been welcome news as it has been for companies that purchase large amounts of energy. Baker Hughes reported an oil rig count increase of 15 last week.

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