86856
OPEC Not Rushing to Boost Production
OPEC Not Rushing to Boost Production

OPEC Not Rushing to Boost Production

OPEC Not Rushing to Boost Production

OPEC is not in a rush to start winding down the production cuts despite oil prices continuing their strong rally, with Brent hitting $80 a barrel on Thursday.
The organization sees the price spike as only a short-term rally driven by geopolitical concerns rather than the fundamentals of a much tighter oil market, OPEC delegates and sources have told Reuters.
Saudi Arabia, OPEC’s largest producer and de facto leader, views the temporary speculator-driven oil price rally as not enough to start raising production, according to an OPEC source familiar with Riyadh’s thinking.
Supply and demand data need to point to an impact on supply in order for OPEC to make a decision to start winding down the cuts, the source told Reuters.
Asked if $79 oil is too high, one OPEC delegate told Reuters: “Not yet."
OPEC’s original goal in the production cut pact was to bring oil inventories in developed economies down to their five-year average, and according to the organization, as of March those stocks were just 9 million barrels over that level, and are probably below it by now.
Yet, OPEC—especially Saudi Arabia—is now trying to justify a prolonged period of cuts to tighten the market further, signaling that the five-year average metric would be revised and/or complemented by other data points, such as forward coverage, longer average periods to consider, or even investment in new longer-term supply.
OPEC and friends are meeting on June 22 in Vienna to discuss these metrics and the state of oil market.
Saudi Arabia is said to be pushing for $80 a barrel or even $100, to balance its budget and boost the valuation of Saudi Aramco ahead of a much-anticipated IPO.
Iran, however, is reportedly at odds with Saudi Arabia on the oil price that OPEC should target although none of them admit there is a price target at all.
According to senior Iranian oil officials, the reasonable oil price for Tehran would be $60-65 a barrel.

 

Short URL : https://goo.gl/HEGJxs
  1. https://goo.gl/fdPpMo
  • https://goo.gl/FMbH1q
  • https://goo.gl/6ntefw
  • https://goo.gl/4QEk6X
  • https://goo.gl/qGtTJn

You can also read ...

China Rejects US Sanctions, Vows to Continue Iran Crude Purchase
As the US and Iran continue to trade barbs over the...
India Vying for US Waiver
India, the second biggest crude customer of Iran, may cut its...
Venezuela Braces for Pricey Gasoline
Gasoline prices in Venezuela will soon catch up with world...
Zanganeh to Attend OPEC, Non-OPEC Committee Meeting
Iran's Oil Minister Bijan Namdar Zanganeh will attend a...
S. Korea Iran Crude Imports Up 15%
South Korea’s imports of Iranian crude rose around 15% in July...
Indonesia Cuts Oil Imports
Indonesia’s PT Pertamina will get an extra 225,000 barrels per...
UK's Quercus Halts Iran Renewable Project
British renewable energy investor Quercus said it will halt...
NPC Not Worried About Exports
The National Petrochemical Company is not concerned about...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus