CARACAS: Saudi Arabia is working with producers inside and outside the 12-member group to stabilise the market, Saudi Oil Minister Ali Al Naimi said in Bahrain Thursday. The country is pleading OPEC to adopt a certain equilibrium price that would cover the entire cost of new investment in the production capacity.
Some investors interpreted this as a sign that Saudi Arabia, the most influential member of OPEC, could push the oil cartel to curb its output and increase prices at its coming meeting December 4.
Slowing US crude oil production and lower crude oil prices could support crude oil prices.
Benchmark January Brent futures LCOc1 were up 67 cents at $45.33 a barrel. US crude hit a six-year low of $37.75 a barrel in August, with WTI futures now exceeding the global financial crisis of 2008-09 for their longest period under $50.
Oil is sliding again following some fleeting gains, while Venezuela is predicting that crude prices may fall to the mid-$20s next year if OPEC fails to stem supply.
Brent futures ended at $44.66 a barrel on Friday.
OPEC ministers will meet informally on December 3 in Vienna, a day before the group’s formal session, Del Pino said.
January futures fell as much as 2.2 percent in NY as the dollar gained, making commodities priced in the USA currency more expensive. That could mean not meeting future demand growth for oil and could lead to a spike in prices later.
Saudi Arabia also reclaimed its position from Russian Federation as the largest crude supplier to China, where it sold 3.99 million tonnes in October, 0.8 per cent more than in September, data from the Beijing-based General Administration of Customs showed Monday. Similar pledges have been made in the past, but output remains high in order to maintain market share.
Furthermore, he mentioned increasing production to increase its exports, for which he doesn’t require any permission from OPEC or any other related organization, as the West-imposed sanctions are likely to be relaxed in the coming months.
Analysts have noted that according to their data crude inventories across the United States rose by 1.1 million barrels last week as market intelligence firm Genscape reported a build of 2.2 million barrels of US crude at the Cushing, Oklahoma delivery point.
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