Oil complex rallies despite China/US trade tension - Oil

WTI Crude Oil

Weekly August WTI Crude OilMore

Organisation of Petroleum Exporting Countries (Opec) officials are also working on putting the cooperation between the cartel, Russian Federation and other oil producers - the so-called Opec+ group now comprising 24 nations - on a permanent footing. Several OPEC countries are not able to increase the production.

Ultimately, Hewson says, the 14 countries in the Organization of the Petroleum Exporting Countries are likely to agree on a production increase.

Two OPEC sources told Reuters that even Saudi Arabia's Gulf allies Kuwait and Oman were against big, immediate increases in output.

"There will be an OPEC conference in Vienna on 22 June.Whenever we have met OPEC members, we have told them that crude oil prices should be controlled, reasonable, responsible and should meet demand".

In the wake of Friday's latest barrage of U.S. sanctions on China, the biggest customer for United States oil exports is threatening to impose its own tariffs on USA energy imports. Output in Saudi Arabia jumped by 85,500 barrels a day, but was partly offset by production outages in Nigeria, Venezuela and Libya.

"We were actually preparing to raise imports according to an earlier government line", he added, referring to a Beijing policy enacted earlier this year to help reduce the United States trade deficit with China. "They've tried to cut inventories on a global basis back in line with this five-year average".

"Opec is fractured or fracturing", McKenna said, as Iran, Venezuela, and Iraq "seek to veto the production increase".

"The focus will be on replacing Venezuelan losses", the bank said.

North Korea's Kim visiting China on June 19-20 - state media
North Korean leader Kim Jong Un landed in Beijing today, where he will meet Chinese President Xi Jinping for a two-day visit. The other major USA exercises with South Korea - Key Resolve and Foal Eagle - took place earlier this spring.

EIA projects that US crude oil production will average 10.8 million barrels per day for full-year 2018, up from 9.4 million barrels per day (bpd) in 2017, and will average 11.8 million bpd in 2019.

"Every decision in OPEC needs the unanimity and I don't believe in this meeting we can reach agreement", he said, adding the issue "has been politicized by President Trump".

Crude oil demand now outstrips supply, and Opec members will debate whether to lift the 18-month-old production cap to stabilize prices.

In an escalating spat over the American trade deficit with most of its major trading partners, including China, U.S. President Donald Trump last week pushed ahead with hefty tariffs on $50 billion of Chinese imports, starting on July 6.

China's aggressive riposte to Trump took some in the industry by surprise. Russia, under pressure from domestic oil companies keen to develop new fields, has said the total increase should be up to 1.5 million barrels. The compliance with agreed cuts has reached 172 per cent and any reduction will translate into drop of 3.1 mb/d. The contract traded at a two-month low of $63.59 early in the session.

If Russia also increases its production, that would be a breach of the cooperation agreement, Ardebili said.

"It would seem that an aggregate increase in production for OPEC+ of between 500,000 bpd and 1 million bpd is the range that is being considered", Tchilinguirian said.

Despite potential downward pressure from large producers increasing output, Goldman Sachs maintained its bullish outlook.

Latest News