Iran issues oil warning as UAE says production can rise

Global Stock Markets

Iran issued a new warning over Mideast oil supplies as the United Arab Emirates said on Tuesday it could increase its own production, the latest remarks to follow President Donald Trump's demand for lower global energy prices. 

The comments by Iranian President Hassan Rouhani and the unexpected announcement by the UAE's oil-rich capital Abu Dhabi came as US benchmark crude traded around $75 a barrel.

A recent decision by the Organization of the Petroleum Exporting Countries to increase the cartel's own production by 1 million barrels a day has yet to tamp down prices. That's led to higher prices at gasoline pumps in the United States as it heads toward midterm elections for Congress.

Speaking to Iranian expatriates Monday night in Switzerland, where he was on an official visit, Rouhani took aim at America.

The US pulled out of the Iran nuclear deal in May and initially said it wanted allies to stop buying Iranian crude entirely. The State Department said Monday it would examine waivers on a "case-by-case basis'' as it re-imposes sanctions.

Rouhani did not elaborate, but Iran long has asserted it could shut down the Strait of Hormuz, the narrow body of water that separates the Persian Gulf from the wider world. A third of all oil traded by sea passes through the strait and the US Navy regularly has direct, tense encounters with Iran's paramilitary Revolutionary Guard there.

The US Navy's 5th Fleet, which patrols the region, has said it has not seen any ``unsafe and unprofessional'' actions by Iranian naval forces in the Persian Gulf since August 2017. It did not immediately respond to a request for comment Tuesday over Rouhani's remarks.

Separately, Iran's interior minister Abdolreza Rahmani Fazli warned Tuesday that ``if we close our eyes for 24 hours, 1 million refugees will go toward Europe through our Western borders'' via Turkey. Some 5,000 tons of narcotics also could be smuggled to the West, he added, according to the semi-official .

Iran lies on a major trafficking route between Afghanistan and Europe, as well as the Persian Gulf states. Large drug seizures are common across the region.

Meanwhile, the state-run Abu Dhabi National Oil Co. issued a surprise statement Tuesday saying it has an oil production capacity of 3.3 million barrels per day. It added that it ``remains on track to increase its production capacity to 3.5 million (barrels per day) by the end of 2018.''

The company also said it ``has the ability to increase oil production by several hundred thousand barrels of oil per day, should this be required to help alleviate any potential supply shortage in the market.''

The oil company previously announced in November it had plans to expand its capacity to 3.5 million barrels of oil per day. It produced some 2.8 million barrels of oil per day in May, according to the most recent figures released by OPEC.

Oil prices rise with Libya's force majeure and emerging slowdown in demand held back markets.

Oil Stock Markets

Oil prices climbed on Tuesday after Libya declared force majeure on some of its supplies, although an overall rise in OPEC output and an emerging slowdown in demand held back markets. 

Brent crude oil futures LCOc1 were at $77.71 per barrel at 0217 GMT, up 41 cents, or 0.5 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 57 cents, or 0.8 percent, at $74.51.

OPEC’s June output was 32.32 million barrels per day (bpd), a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.

Libya’s National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in total production losses of 850,000 bpd due to the closure of eastern fields and ports.

Traders have also been watching U.S. oil production C-OUT-T-EIA, which has surged by 30 percent over the last two years to 10.9 million bpd, absorbing some of the recent disruptions.

Overall, however, analysts said OPEC’s production policy as well as unplanned supply disruptions
were currently the main price drivers.

“In the near-term, the level of OPEC production - deployment of spare capacity by Saudi Arabia, Iraq, UAE, Kuwait (and ex-OPEC by Russia), and involuntary disruptions in Libya, Venezuela, Iran - are more important drivers of crude prices,” Goldman Sachs said in a note published late on Monday.

What has become a concern, at least for producers, is a slowdown in demand which may end years of consecutive records.

In Asia, the world’s top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy.

Oil prices fall admist increasing Saudi output & Asian economic slowdown

Oil Stock Markets

Oil prices fell by more than 1 percent on Monday as supplies from top exporter Saudi Arabia rose and as signs of an economic slowdown in Asia dented the outlook for demand. 

Brent crude oil futures LCOc1 were at $78.16 per barrel at 0316 GMT, down $1.07, or 1.35 percent, from their last close.

U.S. West Texas Intermediate crude futures CLc1 were down 94 cents, or 1.3 percent, at $73.21 a barrel, after rising more than 8 percent last week.

U.S. President Donald Trump wrote in a tweet on Saturday that Saudi Arabia’s King Salman bin Abdulaziz Al Saud had agreed to produce more oil. The White House later walked back on the president’s comments, saying the king said his country can raise oil production if needed.

Saudi Arabia’s output is up by 700,000 barrels per day (bpd) from May, a Reuters survey found on Friday, and close to its 10.72 million bpd record from November 2016, more than making up for disruptions elsewhere within the Organization of the Petroleum Exporting Countries (OPEC).

Voluntary supply cuts by OPEC and some non-OPEC suppliers like Russia have tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new U.S. sanctions against major exporter Iran have sparked concerns of supply shortfalls.

Despite the apparent supply relief from Saudi Arabia, oil markets remain tense over escalating trade disputes between the United States and other major economies including China, the European Union, India and Canada.

Asia’s main economic hub around China, Japan and South Korea all reported a slowdown in export orders in June amid an escalating trade dispute with the United States.

Trump warned close U.S. allies in an interview that aired on Sunday with a threat to sanction European companies that do business with Iran.

Oil markets are also awaiting the impact of looming U.S. sanctions against major exporter crude Iran.

Oil prices drop on OPEC's output deal, but markets to stay tight

Oil prices fell on Monday as traders factored in an expected 1 million barrels per day (bpd) output increase in the wake of an Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna last week. 

Despite this, analysts said global oil markets would likely remain relatively tight this year.
Brent crude futures LCOc1 were at $74.25 per barrel at 0636 GMT, down 1.7 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $68.42 a barrel, down 0.2 percent, supported more than Brent by a slight drop in U.S. drilling activity and a Canadian supply outage.
Prices initially jumped after an OPEC deal to increase output was announced late last week as it was not seen boosting supply by as much as some had expected.

OPEC and non-OPEC partners including Russia have since 2017 cut output by 1.8 million bpd to tighten the market and prop up prices.

After officially meeting on Friday, OPEC gave a press conference on Saturday that implied a bigger increase in supply. 

In the United States, U.S. energy companies last week cut one oil rig, the first reduction in 12 weeks, lowering the total rig count to 862, Baker Hughes (GE.N) said on Friday.

That put the rig count on track for its smallest monthly gain since declining by two rigs in March, with just three rigs added so far in June. However, the overall level remains just one rig short of the March 2015 high from the previous week.

Investors and Traders

Investors and traders are worried that threats of higher U.S. tariffs and retaliatory measures by others could derail a rare period of synchronised global growth.

Oil prices were supported after OPEC and non-OPEC producers agreed on a modest increase in production from next month, without announcing a clear target for the output increase, leaving traders guessing how much more will actually be pumped.

OPEC and non-OPEC said in their statement that they would raise supply by returning to 100 percent compliance with previously agreed output cuts, after months of underproduction.

U.S. crude futures traded at $68.36 per barrel CLc1, down 0.3 percent for the day after Friday’s 4.6 percent rally.

International benchmark Brent LCOc1 fell 1.8 percent, however, to $74.22 per barrel, giving up more than a half of their gains made on Friday.

In the currency market, the euro held firm at $1.1656 EUR=, bouncing back after hitting an 11-month low of $1.1508 on Thursday.

The euro climbed on Friday as traders were encouraged by improved regional economic growth data and new assurances by Italian politicians that their nation would not leave the single currency.

Business activity in Germany and France, the euro zone’s top two economies, picked up in June despite trade tensions between Europe and the United States, IHS Markit data showed.

The dollar fell 0.55 percent to 109.38 yen JPY=, hitting its lowest levels in two weeks as the yen firmed on concerns about global trade frictions.

The Turkish lira gained by up to 1.6 percent on expectations of a stable government after Tayyip Erdogan and his ruling AK Party claimed victory in Turkey’s presidential and parliamentary polls on Sunday.

Iran sees little extra oil if OPEC, partners stick to deal

Iran said on Saturday the world will see little extra oil reaching the market if OPEC and its partners adhere properly to a supply pact, underlining a disagreement with top exporter Saudi Arabia.

OPEC and a group of non-OPEC countries agreed on Saturday that they would return to 100 percent compliance with previously agreed oil output cuts, after months of underproduction by OPEC countries including Venezuela and Angola.

Saudi Energy Minister Khalid al-Falih said this implied an indirect reallocation of extra production from countries unable to produce more oil to those, such as his own and the other Gulf OPEC members, that are able to do so.

But Iran’s OPEC governor, Hossein Kazempour Ardebili, told Reuters that no reallocation was agreed at Saturday’s joint OPEC and non-OPEC meeting or the OPEC-only talks a day earlier.

The comments underline that disagreement between Iran and Saudi Arabia, longtime rivals in the Organization of the Petroleum Exporting Countries, persists despite extensive talks in Vienna this week aimed at resolving differences.

Venezuela has been pumping more than 500,000 barrels per day below its OPEC target because of natural declines in its oil output, but in Iran’s view other countries should not step in to cover the shortfall.

“They cannot go and say Venezuela has 500,000 bpd on the table and there is no cat to eat this meat, I’m the cat and I will jump on it,” Kazempour said.

If countries stick to their allocations, output would rise by 300,000 bpd in the first three months and up to 500,000 bpd by the end of the year, he said - less than the 1 million bpd mentioned by Falih and some other ministers.

Dollar scales 11-month peak, oil slides ahead of OPEC

Simmering trade and political tensions and a pumped-up dollar weighed on world shares on Thursday, while oil prices were under pressure before an OPEC meeting expected to increase the world’s supply of crude. 

Europe’s main stock markets were back near two-month lows and Wall Street futures had also turned lower [.N], as the jitters that have dominated markets for months began to reassert themselves.

Europe’s car shares .SXAP fell to a nine-month lows after Mercedes-Benz maker Daimler (DAIGn.DE) warned the global trade tensions were slowing its sales. Italian stocks and bonds also tumbled on reports a eurosceptic had been given a key finance role.

Asia had been mixed, too, with Japan's Nikkei .N225 adding 0.6 percent and Australia's main index enjoying another strong day before the end of its financial year next week.

China remained the weak link, though, finished more than 1 percent lower .CSI300 .SZSC .SSEC [.SS], and ensured MSCI's broadest index of Asia-Pacific shares .MIAPJ0000PUS fell, dropping as much as 0.5 percent higher at one point.

Strains were compounded by the dollar’s surge to an 11-month high [FRX/]. That raises inflation outside the U.S. and puts pressure on any country or company that has gorged itself on dollar-denominated debt.

The mere absence of new threats from U.S President Donald Trump on tariffs was nevertheless enough to keep hopes alive that all the bluster was a ploy which would stop short of an outright trade war.

Markets had also been encouraged by the People's Bank of China's move to set firm fixings for its yuan, along with the addition of extra liquidity, though the spot yuan rate CNY=CFXS did hit a fresh five-month low.

On Wall Street on Wednesday, tech stocks helped the Nasdaq to an all-time high, though the moves were modest. The Dow Jones .DJI fell 0.17 percent, the S&P 500 .SPX gained 0.17 percent and the Nasdaq .IXIC 0.72 percent.

Twenty-First Century Fox Inc (FOXA.O) had climbed 7.5 percent after Walt Disney Co (DIS.N) sweetened its offer for some of the company’s assets to $71.3 billion, looking to topple Comcast Corp’s (CMCSA.O) bid. 

Oil rises ahead of OPEC, pressured by China tariffs

Oil prices rose on Monday ahead of an OPEC meeting this week that is widely expected to increase global crude supply and as investors assessed the impact of a trade dispute between the United States and China.

U.S. light crude oil CLc1 hit a two-month low of $63.59 a barrel but they recovered to trade at $65.00, down 6 cents, by 1140 GMT.

Benchmark Brent LCOc1, meanwhile, rose more than $1 to a high of $74.45 a barrel and was trading at $74.40, up 96 cents, by 1210 GMT.

Brent hit a 3-1/2-year high above $80 a barrel in May but has since fallen on reports that top suppliers Saudi Arabia and Russia will increase production.

They will meet in Vienna on June 22 to decide forward production policy, with Russia and Saudi Arabia pushing for higher output.

All oil market eyes are now focused on OPEC, Commerzbank commodities analyst Carsten Fritsch said:

U.S. bank Morgan Stanley said in a note to clients that the trade spat meant that economic “downside risks have risen”.

U.S. oil exports have boomed in the last two years as shale oil production has surged, with China becoming one of the biggest buyers.

Oil slumps 3 percent on OPEC supply, China's tariffs

Oil prices fell more than $2 a barrel Friday after two of the world’s biggest producers indicated they might increase output at next week’s OPEC meeting, while U.S. exports were threatened by potential Chinese tariffs on crude oil and refined products.

Oil investors have been nervous ahead of the coming OPEC summit in Vienna. Saudi Arabia and Russia have already boosted production modestly, and have indicated they were prepared to increase output at that meeting.

Brent crude oil LCOc1 fell $2.50, or 3.29 percent to settle at $73.44 a barrel. U.S. crude CLc1 settled $1.83 lower at $65.06 a barrel. In post-settlement trading, U.S. crude retreated further, falling 2.25, or 3.4 percent, to $64.64 a barrel.

Brent crude was on track to end the week down more than 4 percent, while U.S. crude was heading to fall 1.7 percent.

After settlement, China announced $50 billion in retaliatory tariffs, in response to a series of levies by U.S. President Donald Trump earlier.

Some investors were surprised when crude oil and other energy products were included for tariffs at a later date, the official Xinhua news agency reported, citing the Tariff Commission of the State Council.

U.S. crude’s discount to Brent widened in post-settlement trade after China announced the planned tariffs. WTCLc1-LCOc1

Oil edges up, but bulls remain wary ahead of OPEC meeting

Oil prices rose for a second day on Tuesday and volatility subsided to its lowest in three weeks, as investors prepared for a key meeting of the OPEC producer group next week.

Crude remained in a tight trading range, in line with the broader financial markets, which were largely unruffled by a U.S.-North Korea summit aimed at denuclearisation of the Korean peninsula. [MKTS/GLOB]

Brent crude futures LCOc1 were up 17 cents at $76.63 a barrel by 0855 GMT, while U.S. West Texas Intermediate crude futures CLc1 rose 11 cents to $66.21.

The Organisation of the Petroleum Exporting Countries, together with partners including Russia, has cut oil output by 1.8 million barrels per day (bpd) since January 2017 in an effort to boost the market.

Volatility in oil prices has subsided due to caution around the group’s meetings LCOATMIV scheduled for June 22/23, at which it will decide on future supply policy.

With U.S. sanctions threatening to cut Iranian exports and the potential for more declines in Venezuelan production, OPEC kingpin Saudi Arabia and Russia have indicated they would be willing to raise output to make up for any supply shortfall.

In physical oil markets, Middle East light crude grades are set to trade at discounts against their respective official selling prices amid ample supplies to Asia, including from the United States, four trade sources said.

Saudi Arabia has told OPEC that the country increased oil output to a little more than 10 million bpd in May, from 9.9 million bpd in April.

OPEC will squeeze oil buffer to historic lows with an output hike

The oil industry will face the biggest squeeze on its spare production capacity in more than three decades if OPEC and its allies agree next week to hike crude output, leaving the world more at risk of a price spike from any supply disruption.

Spare capacity is the extra production oil producing states can bring onstream and sustain at short notice, providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage.

That buffer could shrink from more than 3 percent of global demand now to about 2 percent, its lowest since at least 1984, if the Organization of the Petroleum Exporting Countries, Russia and other producers decide to increase output when they meet on June 22-23, U.S. bank Jefferies said.

Some analysts say spare capacity could even fall below 2 percent, after years of low oil prices drove down investment in new production across the industry.

Saudi Arabia, OPEC’s de facto leader which has indicated its support for hiking output at next week’s meeting in Vienna, has said it is alert to the potential squeeze on the market.

OPEC and its allies have been curbing supply since January 2017 to boost oil prices and cut bloated global inventories. The price of crude has since surged, climbing above $80 a barrel last month, while inventories have also fallen. 

U.S. asks some OPEC producers to pump more oil

The United States has unofficially asked Saudi Arabia and some other OPEC producers to raise oil output, three OPEC and industry sources said on Tuesday, although it has not requested a specific figure.

Earlier on Tuesday, Bloomberg reported that the U.S. government had asked them to increase oil production by about 1 million barrels a day (bpd). 

Oil prices inches down amidst worries Saudi & Russia pumping more crude

Oil prices edged down on Wednesday amid concerns that Saudi Arabia and Russia will pump more crude in the second half of the year in response to falling global crude inventories and rising consumer prices.

Saudi Arabia and Russia have discussed raising OPEC and non-OPEC oil production by 1 million barrels per day (bpd) to counter potential supply shortfalls from Venezuela and Iran.

Brent crude LCOc1 was down 45 cent, or 0.6 percent, at $74.94 a barrel at 0325 GMT, after settling up 9 cents on Tuesday.

U.S. West Texas Intermediate crude CLc1 was down 24 cents, or 0.34 percent, at $66.49 a barrel. It had settled down $1.15.

OPEC-led supply curbs have largely cleared an inventory surplus in industrialized countries, and stocks continue to decline. The Organization of the Petroleum Exporting Countries is due to meet in Vienna on June 22.

Credit Suisse analysts on Tuesday said even if Russia and OPEC producers raise output, they would likely only add an additional 500,000 bpd, which would leave inventories in the most developed countries short of the five-year average by the end of 2018.

Falling share prices and a stronger U.S. dollar index also weighed on oil prices. U.S. stock markets sank more than 1 percent, while the dollar wobbled at a 10-month high against the euro. A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.

U.S. oil got some support as U.S. crude inventories likely fell by 1.8 million barrels last week, a preliminary Reuters poll showed on Tuesday. [EIA/S]

Industry group American Petroleum Institute (API) releases its weekly oil data at 2030 GMT, followed by the report by U.S. Energy Department’s Energy Information Administration on Thursday, both delayed a day because of the federal Memorial Day holiday on Monday.

Oil prices mixed with expected pressure from increased output & U.S. record oil exports

Oil Stock Markets

Oil prices were mixed in Asian trading on Tuesday, but remained under pressure from expectations that Saudi Arabia and Russia would pump more crude to ease a potential shortfall in supply. 

Brent crude futures LCOc1 were up 31 cents, or 0.41 percent, at $75.61 a barrel at 0213 GMT, after settling at their lowest since May 8 at $75.30.

U.S. West Texas Intermediate (WTI) crude CLc1 was down $1.05, or 1.55 percent, at $66.83 a barrel, sitting around its lowest since April 17.

Concerns that Saudi Arabia and Russia could boost output have put downward pressures on oil prices, along with rising oil production in the United States.

Record crude oil volumes exported from the United States will be heading to Asia in the next couple of months to take another piece of the market away from Russia and producers in the Organization of the Petroleum Exporting Countries (OPEC). 

The United States is set to export 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia, estimated a senior executive with a key U.S. oil exporters.

Data from the Energy Information Administration shows U.S. oil exports peaked at 2.6 million bpd two weeks ago. [EIA/S]

The record outbound volumes come as U.S. crude production hit all-time highs, depressing U.S. prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets. WTCLc1-LCOc1

The difference in the key benchmarks was a chance for Asian refiners to reduce light crude imports from the Middle East and Russia after Brent and Gulf prices touched multi-year highs, traders in Asia said.

n Asia, China - led by Sinopec (600028.SS), the region’s largest refiner - is the biggest lifter of U.S. crude. The company, after cutting Saudi imports, has bought a record 16 million barrels (533,000 bpd) of U.S. crude, to load in June, two sources with knowledge of the matter said.

India and South Korea are the next biggest buyers in Asia, each lifting 6 million to 7 million barrels in June, sources tracking U.S. crude sales to Asia said. Indian Oil Corp (IOC.NS) bought 3 million barrels earlier this month via a tender, while Reliance Industries (RELI.NS) purchased up to 8 million barrels, the sources said, although it wasn’t clear if Reliance’s cargoes would all load in June.

U.S. exports to Thailand will increase to at least 2 million barrels. State oil company PTT PCL (PTT.BK) is 1 million barrels of WTI Midland, while Thai Oil (TOP.BK) and Esso Thailand (ESSO.BK) bought at least 500,000 barrels of Bakken crude each, said traders with knowledge of the country’s crude deals. 

But even if Asia and Europe are keen to take more U.S. crude, the record volumes are straining export infrastructure in the United States, limiting its ability to pump and ship more oil.

Oil prices dip with top three producers looking to increase supplies

Oil Stock Markets

Oil prices fell on Monday, extending a steep decline in the previous session, as the market eyed an increase in output from the world’s three top crude producers, Russia, the United States and Saudi Arabia.

Brent crude futures LCOc1 were at $75.34 per barrel at 0124 GMT, down $1.10, or 1.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $66.31 a barrel, down $1.57, or 2.3 percent.

Brent and WTI have fallen by 6.4 percent and nearly 9 percent respectively from peaks reached earlier in May.

In China, Shanghai crude oil futures ISCc1 tumbled by 4.5 percent to 459 yuan ($71.83) per barrel.

The Organization of the Petroleum Exporting Countries (OPEC), as well as top producer but non-OPEC member Russia, started withholding supplies in 2017 to tighten the market and prop up prices, which in 2016 fell to a more than a decade low of under $30 per barrel.

But prices have soared since the start of the cuts, with Brent breaking through $80 per barrel earlier in May, triggering consumer concerns that high prices would crimp economic growth and stoke inflation.
To address potential supply shortfalls, Saudi Arabia, de-facto leader of producer cartel OPEC, as well as top producer Russia said on Friday they were discussing raising oil production by some 1 million bpd.

Meanwhile, surging U.S. crude production also showed no sign of abating as drillers continue to expand their search for new oil fields to exploit.

U.S. energy companies added 15 rigs looking for new oil in the week ending May 25, bringing the rig-count to 859, the highest level since 2015, in a strong indicator that American crude production will continue to rise.

U.S. crude production C-OUT-T-EIA has already surged by more than 27 percent in the last two years, to 10.73 million barrels per day (bpd), bringing its output ever closer to that of Russia, which pumps around 11 million bpd.

Oil prices ease while Russia warns of gradual production increase

Oil Stock Markets

Oil prices eased on Friday as Russia hinted it may gradually increase output, after having withheld supplies in concert with producer cartel OPEC since 2017.
 

Brent crude futures LCOc1 were at $78.69 per barrel at 0208 GMT, down 10 cents from their last close, and more than 2.2 percent below the $80.50 November 2014 high they reached on May 17. Brent broke through $80 for the first time in more than three years earlier in May.

U.S. West Texas Intermediate (WTI) crude futures were at $70.62 a barrel, down 9 cents from their last settlement.

“Oil prices are now starting to drift a little,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader, adding that this was due to OPEC’s and Russia’s “moves toward an increase in production at the June meeting”.

The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) as well as a group of non-OPEC producers led by Russia started withholding output in 2017 to tighten the market and prop up prices.

But Russia, in particular, has been floating a potential end to the production cuts, with energy minister Alexander Novak saying on Thursday that restrictions on oil production could be eased “softly” if OPEC and non-OPEC countries see the oil market balancing in June.

 While Russia and OPEC benefit from higher oil prices, which have risen by almost 20 percent since the end of last year, their voluntary production cuts have opened the door to other producers to ramp up output and gain market share.

U.S. crude oil production C-OUT-T-EIA has risen by more than a quarter in the last two years, to 10.73 million barrels per day (bpd). Only Russia produces more, at around 11 million bpd.

Output by producers like the United States, Canada or Brazil who are not bound by the OPEC/Russian led agreement to cut, will likely rise further as higher crude prices improves their profitability.

Oil prices drop on potential increase in OPEC output

Oil Stock Markets

Oil prices fell on Thursday on expectations that OPEC members will step up production in the face of worries over supply from both Venezuela and Iran. 

A surprise build up in crude oil inventories in the United States also weighed on prices, driving the spread between Brent crude and U.S. West Texas Intermediate (WTI) close to its widest in three years. CL-LCO1=R

International benchmark Brent LCOc1 futures were down 27 cents, or 0.34 percent, at $79.53 per barrel at 0300 GMT.

U.S. West Texas Intermediate (WTI) crude CLc1 futures were down 17 cents, or 0.24 percent, at $71.67 a barrel.

The Organization of Petroleum Exporting Countries (OPEC) may decide to increase oil output to make up reduced supply from Iran and Venezuela in response to concerns from Washington over a rally in oil prices, OPEC and oil industry sources told Reuters.

Supply concerns in Iran and Venezuela following new U.S. sanctions had pushed both Brent and WTI to multi-year highs, with Brent breaking through an $80 threshold last week for the first time since November 2014.

OPEC and some non-OPEC major oil producers are scheduled to meet in Vienna on June 22. The group previously agreed to curb their output by about 1.8 million barrels per day to boost oil prices and clear a supply glut.

Meanwhile, commercial U.S. crude inventories rose C-STK-T-EIA by 5.8 million barrels in the week to May 18, beating analyst expectations for a decrease of 1.6 million barrels, the Energy Information Administration (EIA) said on Wednesday.

Elsewhere, Libya, which is an OPEC member, cut its oil production by about 120,000 barrels per day as unusually hot weather prompted power problems, an official from the National Oil Corp said on Wednesday.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore, said that prices were getting some support from talk that Sinopec, Asia’s largest refiner, would increase U.S. crude oil imports to a record high.

Oil prices dip with possiblity of easing OPEC supply curbs

Oil Stock Markets

Oil prices edged lower on Wednesday with the possibility of higher OPEC output weighing on the market, although geopolitical risks are expected to keep prices near multi-year highs.

Brent LCOc1 futures fell 43 cents, or 0.5 percent, to $79.14 a barrel by 0218 GMT, after climbing 35 cents on Tuesday. Last week, the global benchmark hit $80.50 a barrel, the highest since November 2014.

U.S. West Texas Intermediate (WTI) crude CLc1 futures eased 25 cents, or 0.4 percent, to $71.95 a barrel, having climbed on Tuesday to $72.83 a barrel, the highest since November 2014.

The Organization of the Petroleum Exporting Countries (OPEC) may decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC and oil industry sources familiar with the discussions

The OPEC-led supply curbs have largely cleared an inventory surplus in industrialized countries based on the deal’s original goals, and stocks continue to decline.

Rising supply in the United States, where shale production is forecast to hit a record high in June, has limited the upward move in prices.

Concerns about a potential drop in Iranian oil exports following Washington’s exit from a nuclear arms control deal with Tehran have driven prices to multi-year highs.

On Monday, the United States demanded Iran make sweeping changes - from dropping its nuclear programme to pulling out of the Syrian civil war - or face severe economic sanctions.

Iran dismissed Washington’s ultimatum and one senior Iranian official said it showed the United States is seeking “regime change” in Iran.

In addition, Venezuela’s crude output could drop further following a disputed presidential election.

The United States is actively considering oil sanctions on Venezuela, where output has dropped by a third in two years to its lowest in decades.

U.S. crude and distillate stockpiles fell last week, while gasoline inventories increased unexpectedly, data from industry group the American Petroleum Institute showed on Tuesday.

Oil prices climb up amidst Venezuela & Iran supply worries

Oil Stock Markets

Oil prices rose on Tuesday on concerns that Venezuela’s crude output could drop further following a disputed presidential election and potential U.S. sanctions on the OPEC-member. 

The United States also toughened its stance on Iran and made a list of sweeping demands, which could further curb the country’s crude oil exports and boost oil prices.

Brent crude futures LCOc1 were at $79.39 per barrel at 0226 GMT, up 17 cents, or 0.2 percent, from their last close. Brent broke through $80 for the first time since November 2014 last week.

U.S. West Texas Intermediate (WTI) crude futures were at $72.47 a barrel, up 23 cents, or 0.3 percent.

Venezuela’s socialist President Nicolas Maduro faced widespread international condemnation on Monday after his re-election in a weekend vote his critics denounced as a farce cementing autocracy in the crisis-stricken oil producer.

The United States is actively considering oil sanctions on Venezuela, where output has dropped by a third in two years to its lowest in decades.

Concerns that looming U.S. sanctions on Iran will curb that country’s crude exports have also been boosting oil prices in recent weeks.

The United States on Monday demanded Iran make sweeping changes - from dropping its nuclear programme to pulling out of the Syrian civil war - or face severe economic sanctions as the Trump administration hardened its approach to Tehran.


Elsewhere, Washington and Beijing both claimed victory on Monday as the world’s two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost U.S. exports to China.

Growing production of shale oil could curb oil prices eventually and widen the price spread between WTI and Brent crude oil, said Nunan.

Oil prices rose as China and U.S. put trade war 'on hold'

Oil Stock Markets

Oil prices rose on Monday as markets reacted to news that China and the United States have put a looming trade war between the world’s two biggest economies “on hold”. 

Brent crude futures LCOc1 were at $79.13 per barrel at 0121 GMT, up 62 cents, or 0.8 percent, from their last close. Brent broke through $80 for the first time since November 2014 last week.

U.S. West Texas Intermediate (WTI) crude futures were at $71.83 a barrel, up 55 cents, or 0.8 percent, from their last settlement.

The U.S. trade war with China is “on hold” after the world’s largest economies agreed to drop their tariff threats while they work on a wider trade agreement, U.S. Treasury Secretary Steven Mnuchin said on Sunday, giving global markets a lift in early trading on Monday.

Still, crude prices were some way off the November 2014 highs reached last week as many traders and analysts say there is enough supply to meet demand despite ongoing production cuts led by the Organization of the Petroleum Exporting Countries (OPEC), plunging output in crisis-struck Venezuela and looming U.S. sanctions against major oil producer Iran.
BP’s Chief Executive Bob Dudley said he expected a flood of U.S. shale and a possible reopening of OPEC taps to cool oil markets after crude rose above $80 a barrel last week.

Dudley said he saw oil prices falling to between $50 and $65 a barrel due to surging shale output and OPEC’s capacity to boost production to replace potential falls in Iranian supplies due to sanctions.

The U.S. oil rig count, an early indicator of future output, was at 844, according to energy services firm Baker Hughes. That was the same count as the week before, which marked the highest level since March 2015.