Oil Prices Rise on Positive Trade Development, Falling Crude Stockpiles

Galtero Lara
Setiembre 12, 2019

A meeting of the Organization of the Petroleum Exporting Countries and allies led by Russian Federation in Abu Dhabi to discuss their deal curbing supply by 1.2 million barrels per day (bpd) did not tackle deepening the cut, Oman's oil minister said.

11 de septiembre de 2019, 13:33London, Sep 11 ( Prensa Latina) OPEC lowered its forecast for global oil demand growth in 2019 and 2020 due to the global economic slowdown and the U.S.

Any formal decision on deeper oil cuts could be taken only at the next OPEC+ meeting in December, the prince said.

Oil prices LCOc1 pared an earlier gain after the report was released to sit just below $63 a barrel.

Bringing more oil into the market will also undermine the OPEC-led attempt to tighten supply and stabilize prices by reducing output from its members and major ally producers.

"OECD oil inventories fell in July and stood 36 million barrels above latest 5-year average - the level originally targeted by supply cut deal".

"Trade disputes and rising uncertainty about the impact of the UK's possible exit from the European Union are reducing global growth through lower business and consumer confidence, supply chain re-assessments, declining investment and direct reduction of trade", added. The U.S. overtook OPEC producers Saudi Arabia and Russian Federation to become, briefly, the world's top oil exporter.

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Demand for OPEC crude will average 29.40 million bpd in 2020, OPEC said, down 1.2 million bpd from this year.

Saudi Arabia's October production would be 9.890 million barrels per day, Prince Abdulaziz bin Salman said after a meeting of ministers from the Organisation of the Petroleum Exporting Countries and its allies led by Russian Federation. It was the first increase this year.

The call signals that the two countries want over-producing countries such as Nigeria and Iraq to curb output to help boost oil prices.

Oil prices fell on Thursday to extend losses from the previous session following a downward revision in OPEC's oil demand forecast and amid speculation that the US may ease sanctions on Iran. Saudi Arabia continues to pump far less than its quota of 10.311 bpd.

The tussle for the No. 1 slot could remain tight in the months ahead.

Aramco selected firms including Bank of America Corp., Citigroup Inc., Credit Suisse Group AG, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley for top roles on the deal, the people told Bloomberg.

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