Saudi Arabia And Russia Deepen Their Alliance For Many Reasons Besides Oil

Most members support a proposal by Saudi Arabia and Russian Federation to extend supply cuts for nine months, Algerian energy minister Noureddine Boutarfa said Thursday.

The increase came despite the threat of a potential rise in shale oil production on the back of the rally in global oil prices, as energy companies ramped up drilling. USA crude oi lost US$1.02 to reach a low of US$48.05 was last trading 20 cents lower at US$48.87.

Today's oil price structure gives US shale drillers another rock to fling at the market's goliath, OPEC , according to Jeff Currie, head of commodities research at Goldman Sachs.

OPEC didn't give US shale enough respect In the International Energy Agency's (IEA) latest monthly report, estimated inventories in industrialized nations totaled about 3.025 billion barrels on March 31.

Gasoline supplies fell by 400,000 barrels, and distillate stockpiles dropped by 1.9 million.

The Energy Information Administration said United States crude stocks declined for the sixth straight week. The contract is on track for a 3.5-per cent climb this week, a second week of gains. USA light crude rose 18 cents to $48.84, Reuters reported.

Shipping data in Thomson Reuters Eikon shows that US crude exports to Asia have soared from a handful of tankers a quarter throughout 2015 and 2016 to 10 tankers in the first quarter of 2017 and that figure is expected to rise.

"When you balance that cut with the increase in other areas it's probably a net-net cut of half a million a day", he said, "The question is whether that 1.8 million barrel cut is enough to cut that overhang".

It seems that the Organization of Petroleum Exporting Countries (OPEC) may be losing control of oil prices worldwide.

Russia's largest oil producer Rosneft will meet agreements with OPEC on oil output reductions, Igor Sechin, Rosneft chief executive, told reporters in Berlin.

In response to the glut, Jefferies LLC on Tuesday reduced its long-term oil price forecast to $70/bbl from $85 based on a "quicker-than-expected rebound in US production/rig count and the results of our bottom-up shale production model, which shows USA exit to exit growth of 0.9 million b/d in 2017 and 1.2 million b/d in 2018". An expansion of the cuts at officially settled upon volumes is expected to achieve the objective of merging world inventories to their five-year normal, Kuwait's Oil Minister Issam Almarzooq said on Tuesday in his email.

  • Zachary Reyes