US crude back above $30 in Asian trade

The agency which is a watchdog for big crude oil consumers, expects the glut in oil supply to continue into 2017.

It will be Naimi’s first public appearance in the United States since Saudi Arabia led the Organization of Petroleum Exporting Countries’ shock decision in November 2014 to keep heavily pumping oil even though mounting oversupply was already sending prices into free-fall.

I don’t like oil as an investment until the underlying fundamentals shift to rising demand and lower sustained production cuts.

He nevertheless cautioned that when oil prices recover from their current levels in the mid-US$30 per barrel to around US$60 per barrel, shale producers would quickly start drilling again, capping any gains.

Worldwide benchmark Brent crude futures were up $1.68, or 5.1%, at $34.69 a barrel at 3.01pm GMT, while U.S. crude futures surged through the $30 a barrel mark, trading up $2.05, or 6.9%, at $31.69 a barrel. And a shaky oil market reinforces both the environmental stigma attached to the oil and gas industry and the mindset that depending on fossil fuels is unsustainable.

“Countries like Iran and Iraq have been out of the market for a while, and if they are to come back, you shouldn’t freeze them out where they are, you should freeze them at a higher level”, Bloomberg News quoted the Nigerian oil minister Emmanuel Ibe Kachikwu as saying Sunday.

Over the course of 2015 to 2021, USA output is expected to reach a record high of 14.2 million barrels per day (bpd), after dipping initially this year and next, the IEA said in its report. Non-OPEC members, including Russian Federation and United States, have also increased their production significantly over the past few months. A gradual decline in output due to lower investment is expected to balance the market in early 2017, according to the International Energy Agency.

Further to an announcement on February 16 calling to freeze oil production, Russia’s energy minister Alexander Novak has now stated that deals between major oil producers, including OPEC and non-OPEC producers, should be solidified by March 1.

The rout in prices of more than 70 per cent in 20 months, is not the same as oil’s previous boom-bust cycles, he said. Iran’s output, the IEA said, will jump about 1 million barrels a day by 2021. The bank reiterated its call for prices to remain volatile while being bound to a range in the coming months until inventories stop increasing.

A senior USA energy official said he doubted the success of a proposal by OPEC and non-OPEC producers to freeze crude oil output in an oversupplied market and boost prices. A number of over 500 million barrels in reserves is an all-time high in nearly 35 years of the weekly report’s history. It had about $1.2 trillion in sales revenue three years ago.