Iran Says Will Cooperate With OPEC To Stabilize The Oil Market

The front-month Brent contract on the ICE Futures Europe exchange was about $1.80 barrel cheaper than the sixth month, compared with a spread of $3.08 barrel on July 29.

A similar decline when the USA energy department releases the official data on U.S. commercial crude inventories later Wednesday could see WTI “pull back to the $45 handle”, he said in a note. “At 523.6 million barrels, U.S. crude oil inventories are at historically high levels for this time of year”, the EIA said in the report.

Oil prices slipped on Thursday as the market focused on oversupply and fading hopes of a production freeze. Then the buck-denominated oil prices had the additional support of a depreciating United States dollar, as well as the declining USA rig counts and oil production.

Oil prices fell on Friday after the Saudi energy minister tempered expectations of strong market intervention by producers during talks next month, and as analysts pointed to an ongoing supply overhang that was weighing on markets.

This time, USA oil production has shown signs of stabilisation as the rig counts have actually been trending higher, while the dollar has stabilised somewhat. “Even next year, we have to be cautious and not expect that the market will rebalance quickly”. But will it be different this time?

He said the “market is moving in the right direction” already.

Iran, OPEC’s third-largest producer, boosted output after Western sanctions were lifted in January, and had to refused to join OPEC and some non-members in an accord earlier this year to freeze production levels. The Iranian oil minister confirmed Thursday he would attend a meeting in Algeria where some OPEC members may consider artificial market actions.

Oil resumed its drop after industry data showed USA stockpiles rose, keeping inventories at the highest seasonal level in at least 30 years as peak summer demand in the world’s largest consumer of the fuel nears its end.

The softening oil prices filtered through to energy firms across the region, with CNOOC and PetroChina in Hong Kong sinking, although earlier sharp losses were pared.

Following a streak where the national retail average price of gasoline dropped on 54 of 55 days, pump prices have now increased on 12 of the past 17 days and each of the past six, AAA reports. The key levels of support and resistance are shown on the charts in blue and red respectively. While markets have been fixated on OPEC speculation, robust demand is whittling away brimming oil inventories, according to Blanch.