Oil: to reduce production or to control supply

Iran and OPEC kingpin Saudi Arabia have been raising exports despite the approaching Sept 26-28 meeting in Algeria, where the Organization of Petroleum Exporting Countries and other major producers are set to discuss an oil production freeze.

“With the price of oil having almost doubled since the start of this year, the service industry must now seek to increase price to restore the financial viability it requires to develop and deploy technology, maintain its geographical footprint, and preserve its technical expertise”, the executive added. Saudi Arabia, Kuwait and the United Arab Emirates pumped at or near record levels and Iraq pushed output higher, according to the agency. The reasons vary, but for each it comes down to pursuing established medium- to long-term market strategy.

For countries like Iran that do not report official trade data, counting tankers is the primary means of estimating their oil trade, although counts may vary from tracker to tracker.

Russia, the world’s second-largest petroleum producer after the U.S., increased production to more than 11 million barrels a day, according to daily data published on the website of the Energy Ministry’s CDU-TEK unit earlier this month.

Futures dropped as much as 2.7 per cent on the New York Mercantile Exchange.

“Commodities in general have benefited from hopes of an extended period of very low global interest rates, which leaves them vulnerable to a resumption of Fed tightening and any renewed strength in the U.S. dollar”. Qua Iboe has been under force majeure since a “third-party impact” on a pipeline in July, according to Exxon.

The Seadelta had halted loading after fighting on Sunday between local Petroleum Facilities Guard units and forces loyal to eastern-based military commander Khalifa Haftar.

“With demand holding steady, markets are moving closer to balance by the end of 2016, supporting what we have called a medium-for-longer oil price environment”, Schorn said while speaking during the Simmons 2016 European Energy Conference in Gleneagles, Scotland.

If this weren’t enough, the U.S. Department of Energy released its “Long-Term Strategic Review of the U.S. Strategic Petroleum Reserve” and found that the SPR’s current level of almost 700 million barrels should be reduced to a more appropriate level of 530 million-600 million barrels.

All three countries may struggle to sustain any increase because underlying political problems remain unresolved. If it’s extensive, then they may miss production targets. It looks as if initial predictions of for the price of crude oil reaching $60 this year are now unrealistic while dreams of the valued commodity finally returning to historical highs are now all but shuttered for the time being.

It was reported on Thursday that USA retail sales dipped in August for the first time in five months. That’s 18 months later than it was a month ago. Just don’t expect the key players at that meeting to do anything meaningful about it. That’s an area that I believe will offer support, so we could get a bit of a bounce as we grind down there. Off-topic, inappropriate or insulting comments will be removed.