Oil Rises As US Inventories Fall On Strong Demand

17 June, 2018, 13:37 | Author: Barbara Daniel
  • Trump bashes OPEC for 'high' oil prices

Production cuts by Opec have led to worldwide oil prices hitting a four-year high last month that forced a Rs 3.8 per litre hike in petrol and Rs 3.38 a litre increase in diesel prices.

The US hasn't asked Opec to bolster supplies, United Arab Emirates Oil Minister Suhail Al Mazrouei - who this year holds Opec's rotating presidency - told CNN.

Trump sparked the latest back-and-forth when he renewed his attack on OPEC in a tweet on Wednesday that said oil prices are too high and that the cartel was "at it again".

China on Thursday reported a drop in refinery activity, from 12.06 million barrels per day (bpd) in April to 11.93 million bpd in May, although year-on-year runs were still up by 8.2 percent.

"Looks like OPEC is at it again", Trump said in an April 20 tweet. The Organisation of Petroleum Exporting Countries (Opec) collectively produces some one third of global oil supply.

At 1030 GMT, the August ICE Brent crude futures contract was down 31 cents/b from Wednesday's settle, at $76.43/b, while the NYMEX July sweet light crude contract was up 16 cents at $66.80/b.

"The prospect of easing supply curbs from OPEC-led producers continues to be reflected in oil's overall depressed price". U.S. crude traded Wednesday near $67 a barrel. "There is going to be a real issue", he wrote, predicting prices above $US150 per barrel within two years.

In part because of strong demand, U.S. crude inventories fell by 4.1 million barrels in the week to June 8, to 432.4 million barrels.

But the US request and a Trump tweet in April that blamed OPEC for high oil prices has caused a split within the oil group, with some members accusing Saudi Arabia of being too eager to do Trump's bidding.

With output in Russian Federation rising back above 11 million bpd in June and Saudi production climbing to more than 10 million bpd, supplies from the top three producers are increasing.

"Even if the Iran-Venezuela supply gap is plugged, the market will be finely balanced next year and vulnerable to prices rising higher in the event of further disruption", the Paris-based agency said.

Saudi Arabian Crown Prince Mohammed bin Salman and President Vladimir Putin are meeting in Moscow tomorrow to discuss oil policy on the sidelines of the opening match of the FIFA World Cup.

Prices, however, were already rising on growing demand and expectations that a sharp pullback in new investment by oil companies would reduce the oil supply.

Barely recovered from the roller coaster ride of recent weeks, traders are holding their breath for the June 22 meeting of oil ministers from OPEC member states in Vienna.

"OPEC has the lowest spare capacity ever right now", said fund manager Pierre Andurand, in a tweeted response to Trump.

"At OPEC's meeting in a good week's time, Saudi Arabia apparently plans to make several proposals that all boil down to increasing production on a one-off or gradual basis by between 500,000 and 1 million barrels per day", Commerzbank analysts said in a note.

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