Kuwait next to back oil production cap extension
- Author: Zachary Reyes May 22, 2017,
May 22, 2017, 16:12
"Crude production was down 535,000 barrels per day compared to April 2016".
Oil prices continue growing.
Russian Energy Minister Alexander Novak said the proposed extension of output cuts aimed to bring global commercial oil inventories down to the five-year average and stabilize the market.US bank Goldman Sachs said the deal would likely extend the oil price rebound "although the rally so far.has remained modest compared to the move that occurred last year when the OPEC cuts were first announced".
OPEC officials will meet next week in Vienna to talk about extending oil production cuts that have stabilized oil prices but haven't rebalanced the global oil market yet.
Saudi Arabia and Russian Federation, the world's top two oil producers, agreed on Monday on the need to extend output cuts for a further nine months until March 2018 to rein in a global crude glut, pushing up prices. "As OPEC turned down the taps from record Q4, 2016 production, the average OPEC basket price of crudes rose from $47.59/b in Q4, 2016 to $52.03/b in Q1, 2017". Iraq earned an extra $10.5 million a day, according to the report. US crude was up 4 cents, or 0.1 percent, at $48.89 per barrel.Both benchmarks have risen more than $5 since hitting five-month lows 11 days ago. However, the agency noted an improving outlook for USA crude oil production, which is seen rising by 345,000 b/d from the previous year, and up 790,000 b/d from the end of 2016.
Extending the cuts at already agreed-upon volumes is needed to reach the goal of trimming global stockpiles to the five-year average, Kuwait's Oil Minister Issam Almarzooq said in an emailed statement on Tuesday. "A major contribution to falling crude stocks in the next few months will be a ramp-up in global crude oil runs".
On the demand side, The IEA reiterated its forecast rate of growth at 1.3 million bpd for this year, to a total 97.9 million barrels, although over the first half of the year demand will grow more slowly because of India, the U.S., Germany, and Turkey. The report noted Chinese demand remains relatively strong even as India's demonetization policy continues to cast a long shadow over oil demand, with United States demand expected to be flat in 2017.