Iran, other dissenters complicate OPEC oil output boost

Share

OPEC, which stands for Organization of the Petroleum Exporting Countries, is a cartel of 14 oil-producing countries, among them Saudi Arabia, Iran, Venezuela and Iraq.

In April, Trump also blasted OPEC on Twitter, accusing the group of "artificially" raising oil prices.

With output in Russian Federation rising back above 11-million barrels a day in June, and Saudi production climbing back above 10-million barrels a day, supplies from the top three producers are increasing.

Among the set of ideas behind the proposed buyers club is getting additional quantities of U.S. crude to Asia to keep the oil cartel under pressure and prevent it from taking decisions that could impact volatility in the oil market and take prices up.

The president has been vocal about his dissatisfaction with oil prices in the past.

"Not good!" the president tweeted even as prices fell amid the expectation that the cartel may soon relax its output cuts. Kazakhstan's oil output in the first five months of 2018 rose 6.4 percent from the same time a year ago to 37.7 million metric tons (1.83 million bpd), Deputy Energy Minister Makhambet Dosmukhambetov said on Tuesday.

"I think the Trump tweet makes the Saudi's job of getting compromise at the OPEC meeting tougher", said Joe McMonigle, senior energy policy analyst at Hedgeye Potomac Research in Washington. "You can not place sanctions on two OPEC founder members and still blame OPEC for oil price volatility", he said, referring to his country and Venezuela.

Brent crude oil LCOc1 lost 82 cents to trade at $75.92 a barrel by 11:32 a.m. (1532 GMT), while West Texas Intermediate crude CLc1 slipped 24 cents to $66.40.

South Korea stuns Germany 2-0
Mexico take on the mighty Brazilians in Samara on Monday, hoping to progress to the quarter-finals for the first time since 1986. Jo's biggest save came in the 47th minute, just as the match started opening up following a lackluster, scoreless first half.

According to the ministry, Pradhan is scheduled to visit Vienna on June 20-21 to participate in the OPEC global seminar and will discuss these key issues with OPEC Secretary General Sanusi Barkindo and ministers from the 13-nation cartel.

Martijn Rats, Morgan Stanley's global oil strategist, said oil prices would be supported "if supply and demand is in balance, if inventories have drawn significantly and spare capacity isn't all that great".

But the Paris-based IEA, echoing statements from oil producers as well as analyst comment in recent weeks, said there may be a change to the so-called Vienna agreement.

Under one scenario weighed by the IEA, output from Venezuela and Iran by the end of 2019 could be 1.5 million barrels per day lower than it is today.

The country boosted production after the USA 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.

Non-OPEC suppliers include the United States where producers have returned to the business in droves, encouraged by rising prices.

As the output cuts are bigger than intended, the producers would only need to announce full compliance with their overall target to advertise that supplies will rise.

Share