USA crude oil prices dip after unexpected rise in stockpiles

Iran, Iraq and OPEC join cuts.

OPEC is thought to be producing about 1.7 million barrels per day above its official output ceiling of 30 million barrels per day.

But Krane says the policy is hurting some OPEC members who rely heavily on oil revenues to balance their budgets.

Oil rebounded from the lowest price in more than six years in London as the Organization of Petroleum Exporting Countries prepares to meet on Friday.

However, it forecast a moderation in consumption over the rest of the year, with 2016 demand growth expected to average 300,000 barrels per day.

It’s thought a cut in output would only actually happen if Iraq agreed to do likewise, Iran also limited production once back on global markets, and non-OPEC member Russian Federation cut output too.

Ilham Shaban also added that the figures released in connection with the GDP of developed countries also were among the factors affecting the price of oil.

Iran’s oil minister was quick to dismiss on Thursday the possibility of limiting Tehran’s production ramp-up once Western sanctions are lifted.

Saudi Arabia has thrown down a challenge to big rival oil producers ahead of this week’s Opec meeting, saying it would back output cuts as long as they were supported by countries both inside and outside the cartel.

Sources told Reuters on Thursday there was little chance of Saudi Arabia making a formal proposal for OPEC output cuts, contingent on co-operation from non-OPEC, as reported by Energy Intelligence. Currently, about 0.5 to 2 million barrels of oil per day are being produced in excess of demand, which, in turn, led to a price drop of more than 60 percent since June 2014.

At 1552 GMT, the Brent front-month futures contract was up 1.77% or 75 cents to $43.24 per barrel, while WTI was up 1.05% or 42 cents to $40.36 per barrel, with oil oversupply concerns continuing to dominate market chatter as OPEC ministers convened. The Paris-based IEA was established four decades ago to provide a counterweight to OPEC following the Arab oil embargo, and traditionally maintains a laissez faire policy toward markets. Ultimately, crude oil settled at $39.94 a barrel.

Will Saudi Arabia keep pumping oil at an all-out pace? The U.S. benchmark crude traded at a $3.04 discount to Brent.

Lower prices are expected to knock around 1 million barrels of US production a day off by this time next year, and nearly 20 companies have already filed for bankruptcy.

“By allowing output to fall they would push up prices, which would result in higher production in North America, and a loss of market share”, said Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance.