Oil Up as Russian Federation Considers OPEC Talks

“Saudi Arabia’s cut in official selling prices is quite meaningful as it indicates that Opec is still willing to fight for market share”.

According to a Reuters analysis of Saudi data on its exports and production, and using IEA estimates of world product demand, Saudi crude exports have amounted to around 8.1 per cent of the global market since November 2014, after falling to 7.9 per cent in 2014.

Facing protests from the oil industry, it has also proposed the softer measure of keeping Russia’s oil export duty mechanism unchanged next year – a move that could bring around 200 billion roubles to the budget – instead of going through with an agreed cut.

The OSPs probably didn’t decline by as much as indicated by the contango because they hadn’t risen by as much in the third quarter, when the contango virtually disappeared amid strong demand for prompt supplies. The country suggested either transforming the current OPEC, or setting up a new organization that includes all countries producing 1 or 1.5 millon barrels per day, to control worldwide oil production.

Crude oil is in focus today after Saudi Arabia said it would cut the price of its light-crude deliveries to Asia.

“The fall in the number of oil rigs in the U.S. will accelerate the decrease in crude production we’ve been seeing recently”, Hong Sung Ki, a Seoul-based commodities analyst at Samsung Futures Inc, said by phone.

“We have to do the right thing”, Al-Naimi said in an interview published Monday in India’s The Economic Times. The European benchmark crude traded at a US$2.60 premium to WTI. Commercially viable producers “will continue to prevail”, and the Organisation of Petroleum Exporting Countries (Opec) will increase its market share, he said. The decrease was the deepest since January. Medium crude will sell at a discount of 85 cents a barrel to the regional benchmark, the widest since March.

However, oil firms and the Energy Ministry have said such measures could result in oil production being slashed, with a few critics saying output could be cut by around 100 million tonnes over three years. They fell below seven million bpd in seven months of 2014, having exceeded that rate in every month of 2012 and 2013. The kingdom pumped 10.3 million barrels daily last month as it exited its peak summer period for domestic demand, data shows. Producers in the Gulf region sell mostly under long-term contracts to refiners.

Looking at demand 1st, and then looking at the supply, and how it has been affected since the Crude Oil price dive, That is how you know the strategy is working.