OPEC set for stormy session over supply

OPEC set for stormy session over supply

OPEC set for stormy session over supply

US crude oil CLc1 rose 79 cents a barrel to settle at $65.85. That prompted Trump to call on OPEC to cut production, tweeting in April and again this month that "OPEC is at it again" by allowing oil prices to rise.

Despite potential downward pressure from large producers increasing output, Goldman Sachs maintained its bullish outlook. Venezuela's oil exports are falling by tens of thousands of barrels every month while Iranian exports can fall by 200,000 and a million barrels a day by next year.

Tankers waiting to load more than 24 million barrels of crude, nearly as much as state producer PDVSA shipped in April, are sitting off the Opec member's main oil port.

Expressing his optimism over regaining balance to the worldwide oil market, Al Mazrouei said: "Looking ahead, I remain optimistic that we will fulfil our goal of delivering sustainable oil market stability, which is meant to serve the long term interests of producers, consumers and the global economy".

Lower crude oil prices are of course helpful for India. The fact that we closed at the very bottom of the range for the day tells me that the market is very likely going to continue.

"The market is well-supplied, and OPEC should abide by its decision up to the end of the year", he said.

"But to that extent, the development coming ahead of the Opec meeting adds to the nervousness in the oil markets", he said.

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They will meet in Vienna on June 22 to decide forward production policy.

According to one of Reuters' sources, at the technical panel on Monday, Iran and Venezuela, as well as Algeria, continued to voice opposition to a production boost.

The prospect of binding Russian Federation, the world's largest exporter after Saudi Arabia, more closely to OPEC might help persuade Iran and Venezuela to back higher production in the second half of the year.

For Opec, the next move will be to consider to return to a compliance ratio of 100 per cent of the agreed production cuts of 1.8 million barrels per day in 2016. While the volumes would ultimately get shipped elsewhere, absent China the price could be depressed, traders said.

China said it would retaliate immediately by suspending previous trade agreements with Trump's administration and slapping duties on American exports, including crude oil. "A meaningful increase in long-haul flows from some of the key OPEC exporters would go a long way in turning the crude tanker market around, especially since it will impact the physical market as well as provide a boost to the all-important market psychology".

Some traders are also saying that even if the increase covers the lost production from Venezuela due to economic issues and the reduced output from Iran due to the USA sanctions, the rise in production may fall short of expectations if Iran, Iraq and Venezuela continue to produce at reduced rates.

If implemented, China may react to US tariffs by putting a 25 percent duty on USA crude oil imports, which have been surging since 2017, to a business now worth nearly $1 billion per month.

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