The amount of oil being supplied to the global market is "satisfactory", Saudi Arabia's energy minister said Sunday, after US President Donald Trump called for an immediate output hike to push down prices, agencies reported.
Saudi Arabia Energy Minister Khalid al-Falih told reporters that participating countries have provided over the last three months "a lot of supply to offset decreases" in Iran, Venezuela and Mexico. Citigroup Inc. sees crude at that level in the fourth quarter, but sees risks that it will go higher.
Non-member production overall is forecast to rise by 8.6 mbd to 66.1 mbd by 2023 on higher global demand, the report added, but a relative tapering off from 2020 will see cartel members' crude production shrug off a medium-term trend fall, OPEC predicted.
USA commercial crude oil inventories (C-STK-T-EIA) are at their lowest since early 2015 and although US oil production (C-OUT-T-EIA) is near a record high of 11 million barrels per day (bpd), subdued US drilling activity points towards a slowdown in output.
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On Sunday, Opec and its allies at a meeting in Algiers ruled out any immediate boost in crude output but reassured the market that they would do whatever is necessary to balance the supply.
The price of crude oil has jumped from about $50 (£38.29) a barrel in late 2016 to highs of $80 this summer, partly due to the cartel's agreement with Russian Federation to cut production for 18 months. "This is because OPEC have essentially ignored President Trump's call to raise output to help lower prices", said Ashley Kelty, oil and gas research analyst at financial services firm Cantor Fitzgerald. He was returning to a playbook that won him a significant victory in June as OPEC and its allies agreed to roll back production cuts and pump an extra 1 million barrels a day.
"Fears that supply will be hit when the United States sanctions on Iran kick in come November are pushing up oil prices". The biggest source of new global supply, US shale, is also experiencing growing pains as pipeline bottlenecks and workforce issues hamper growth.
Brent crude futures were at 79.84 dollars per barrel. However, Saudi Arabia and Russian Federation now say they have no more capacity.
USA officials have said they do not intend to change the Iranian regime.