Russia Supports OPEC Plan to Lift Oil Production

OPEC strikes deal to boost oil production | TheHill

Outside of OPEC's sphere of manageable influence, the USA shale oil industry remains the greatest threat to global supply/demand imbalances since its surge of over 5.6 mpb in production - or over 140 percent from the 2008 production levels of 3.97 mbpd, capturing a large market share and diminishing OPEC's ability to bully the market to its will. The 14 member nations of OPEC - mainly Saudi, Venezuela, Iran and Iraq - controlled a little more than 80 per cent of world crude oil reserves in 2016.

Meanwhile Riyadh, which cheered Washington's exit from the Iranian nuclear deal, is under pressure from its U.S. ally to open the spigots as Trump hopes for lower pump prices ahead of November's mid-term elections. Subsequently, the prospect of a full-blown trade war will likely dent risk on sentiment, which in turn will likely keep a lid on further gains for crude prices. Trump wrote on Twitter after OPEC announced its decision.

The United States, China and India had urged OPEC to release more supply to prevent an oil deficit that would hurt the global economy.

"Saudi Arabia obviously can deliver as much as the market would need, but we're going to be respectful of the 1 million barrel cap - and at the same time be respectful of allocating some of that to countries that deliver it", Al-Falih said.

Yergin said Saudi Arabia and the United Arab Emirates support the current, tougher US policy toward Iran, Saudi Arabia's rival for influence in the region.

Moscow had long argued for a hike, feeling the pressure from domestic oil companies eager to produce more so they can cash in on the higher prices.

Ahead of Friday's meeting, OPEC's largest producer, Saudi Arabia, was seen to be open to higher production but Iran had been hesitant.

Trump slapped fresh sanctions on Tehran in May and market watchers expect Iran's output to drop by a third by the end of 2018.

OPEC agreed on Friday to raise oil production by around one million barrels per day from July for the group and its allies, an OPEC source said.

Iran's Oil Minister Bijan Namdar Zanganeh walked out that meeting, telling reporters he did not think an agreement could be reached. Those which can not, will not.

But Falih said pro-rata quota reallocations did not have to be strict, meaning Saudi wanted to fill the gaps left by others.

Much of the shortfall has come from Venezuela, where an economic crisis has savaged petroleum production. "And that implies there will be indirectly a reallocation", Falih said.

The meeting of the ministerial monitoring committee of OPEC+, which usually proceeds from the recommendations and future scenarios of the technical committee, was held on June 21 in Vienna. The measure had helped rebalance the market in the past 18 months and lifted oil to around $75 per barrel from as low as $27 in 2016.

But unexpected outages in Venezuela, Libya and Angola have effectively brought supply cuts to around 2.8 million bpd in recent months.

OPEC sources also said Iran had demanded that US sanctions be mentioned in the group's post-meeting communiqué.

"Zanganeh can go back to his country and say "I won", because we are keeping the original agreement unchanged".

In practice, only Saudi Arabia and Russian Federation have the capacity to add significant amounts of crude in the next few months.

Related News:



Most liked

Trump threatens 20 per cent tariff on European Union cars
Mercedes is expected to sell about 20,000 convertibles this year in the United States and BMW fewer than 16,000, LMC projected. It accounts for 5 percent of Volkswagen's VW brand sales and 12 percent of its Audi brand sales.

Coffins at DMZ to collect USA service members' remains from North Korea
Trump and Kim left the summit signing a document that the president described as "important" and "comprehensive". The imposed sanctions came following the cancelation of training exercises held between South Korea and the US.

First Lady Melania Trump Visits Border Detention Facility In Texas
The prosecutions had been mandatory under the administration's "zero tolerance" policy, which was unveiled in May . After a downturn a year ago , the flow of migrants from Central America and Mexico has surged since October.

Priyanka Chopra and Nick Jonas PDA game going strong!
But recently, Priyanka Chopra is reigning the headlines for her alleged relationship with American singer-songwriter Nick Jonas . The duo made no attempt to hide from the paparazzi as they were snapped while entering and exiting a restaurant on Friday night.

South Korea Vs. Mexico Betting
Mexico coach Juan Carlos Osorio said he prepared more for the match against South Korea than for the game against Germany . Mexico so far is one of the teams that has a flawless run in the campaign and has conceded just one goa.

India celebrates Int'l Yoga Day
Sheikh said the Indian Consulate has been in the forefront in promoting yoga in Kingdom for the last three years. Yoga can also be very effective in developing coping skills and reaching a more positive outlook on life.

France defense excels in 1-0 victory over Peru in Group C
France are unbeaten in their last eight World Cup fixtures against CONMEBOL opposition (W4 D4). Subs used: Farfan (7), Santamaria (5), Ruidiaz (5). "I don't vote for the man of the match ".

Melania Trump's jacket raises eyebrows for edgy message
The youthful jacket sharply contrasts with the first lady's typically bold, foreign-flavored wardrobe . Since the Stormy Daniels stories began, Melania has been noticeably absent from her husband's side.

XXXTentacion shot in Miami, has no pulse, TMZ reports
The 20-year-old rising star, whose real name is Jahseh Dwayne Onfroy, was shot outside a Deerfield Beach motorcycle dealership. The artist's first album, titled "17" and released in August 2017, debuted at the No. 2 spot on the Billboard 200 chart.

China hits back at Pompeo; accuses USA of blackmail tactics
Navarro also indicated that no trade talks with China were planned but said the administration was willing to hold discussions. The major averages all finished the session in the red, although the Dow underperformed its counterparts by a wide margin.

Prince Louis to be christened by the Archbishop of Canterbury next month
Kate Middleton and Prince William's third child will be christened next month, Kensington Palace announced in a statement. On Saturday, Prince Harry and Meghan Markle were spotted at Celia McCorquodale and George Woodhouse's nuptials.

The new cover of TIME forces Donald Trump to face immigrant children
The mother and child were put into a van and driven off soon after, presumably to a detention center for processing. President Trump on Wednesday signed an executive order aimed at halting the family separation policy.

Instagram expands into long videos to compete with YouTube
People wanting to watch a one hour video on their TV, for instance, won't enjoy wasted screen real estate and black bars. This means you can use the IGTV service without either alienating an IG-centric audience or being alienated yourself.

STAR WARS 'Anthology' Films Put on Hold
On the small screen, we will be getting the Jon Favreau live action and Dave Filoni Star Wars Resistance animated series. It appears that Solo: A Star Wars Story may be the last spin-off you see for a while from the galaxy far, far away.

Trump digs in on immigration amid family separation crisis
Nielsen said that releasing parents with their children amounts to a "get out of jail free card" policy for illegal immigrants. Children traveling with adults are separated from their families and taken into USA custody.