"With unplanned outages escalating, geopolitical risks rising, and US shale production facing infrastructure bottlenecks, Saudi Arabia is once again back in the driver's seat exerting significant influence over the oil market in 2018", Croft, the global head of commodity strategy at RBC Capital Markets, said Thursday.
The International Energy Agency warned that economic turmoil in Venezuela and renewed sanctions on Iran will likely remove 1.5 million barrels per day from the market by the end of 2019. Saudi Arabia has already started pumping more crude. "Not good!" the president said.
Trump may hope his comments will put pressure on US allies within OPEC to raise their oil production sooner rather than later, staving off any further increase in prices and easing the recent hit to American consumers' pockets at the gas pumps.
Discussion in the crude oil market is degenerating into a single "will they or won't they" focus on whether the Organization of the Petroleum Exporting Countries (OPEC) will ease their output restrictions next week. Following the decision of U.S. President Donald Trump to leave the nuclear deal with Iran, many global companies, including European companies, have started to reduce purchases of Iranian oil and pull out from oil and gas projects in Iran.
Nigeria suffered the biggest decline in crude oil production in the Organisation of Petroleum Exporting Countries last month as its output fell by 114,500 barrels per day.
Opec and non-Opec producers struck a deal in late 2016 to trim production by 1.8 million barrels per day to reduce a global glut that had sent prices crashing.More news: Canadian foreign minister calls Trump tariffs 'absurd' and 'illegal'
The country boosted production after the US lifted sanctions related to Iran's nuclear program in 2016, but analysts expect output to fall when the Trump administration's decision to withdraw from the deal takes full effect later this year.
Those against an increase this time are concerned it would threaten the unity of the 24-nation alliance involved in the deal and say forecasts from OPEC and others calling for higher demand in the second half of 2018 are too optimistic.
The country recently raised the official selling-price differentials (OSPs) to Asia for July crudes, which are now about $2.20 per barrel above the Dubai benchmark, "marking the firmest Iranian differential since the early days of the oil price collapse in 2014", writes Michael Tran of RBC Capital Markets in a note published Thursday afternoon. Adding to their $500bil of losses since 2007.so if all production growth is unprofitable what makes oil prices high??
"To make up for ... losses (from Iran and Venezuela), we estimate that Middle East OPEC countries could increase production in fairly short order by about 1.1 million bpd and there could be more output from Russian Federation on top of the increase already built into our 2019 non-OPEC supply numbers".