Goldman On OPEC & Oil Risk In 2017

Going forward, oil prices are likely to take direction from statements made by members of the Organization of Petroleum Exporting Countries on the sidelines of the Gas Exporting Countries Forum, taking place in Doha, said Peter Lee, Asia oil and gas analyst at BMI Research.

Ahead of the meeting, Russian Energy Minister Alexander Novak said Russia would “support any decision” adopted by the organisation. While it has not yet responded to the proposal, the flexibility shown by others suggests OPEC members may be coming nearer to consensus as the November 30 meeting approaches.

US crude oil prices declined 0.33% to settle at around $45.42 a barrel, while Brent, the global benchmark, dipped 0.3% to settle at around $46.49 a barrel. Crude oil prices have since reversed early losses with WTI now holding just above $45 a barrel and Brent at around $46.30 a barrel.

Stockpiles at the USA delivery hub for crude futures in Cushing, Oklahoma, which the EIA said increased almost 700,000 barrels last week, rose 303,001 barrels in the week to November 15, according to traders, citing energy monitoring service Genscape.

The climb in inventories was mainly due to higher imports that averaged 910,000 barrels per day (bpd), according to data released by the U.S. Energy Information Administration on Wednesday.

The American Petroleum Institute reported a build in USA oil inventories of around 3.6 million barrels, which included a 1.1 million-barrel build at the key oil storage hub in Cushing, Okla.

The gain left US crude supplies at 490.3 million in the week ended November 11, according to EIA data. It fell in post-settlement by 56 cents United States, or 1.2 per cent, to US$45.01. OPEC sources in the Gulf have said that they hoped for Iran to cap its production at current levels of 3.6-3.7 million barrels per day.

Saudi Arabia is one OPEC member (also the most influential) that insists that producers use the secondary sources figures reported by OPEC when determining who will cut/freeze production and who will cut how much.

“Iranian and Iraqi intransigence to the proposed output cuts remains in full force while competitive pressures among OPEC members was highlighted by news that Iran displaced Saudi Arabia as the top oil supplier to India”, he said. “We produced about 80 million tons of crude last year and will produce around 76.5 million tons this year”, he said.

In the USA, the benchmark S&P 500 index ended higher and edged closer to its record high on Thursday as bank stocks got a boost from the prospect of higher interest rates and consumer discretionary stocks were helped by economic data and earnings.