Published: Thu, May 31, 2018
Finance | By Jaime Brady

Oil price reverses… but how much can it fall, really?

Oil price reverses… but how much can it fall, really?

The record outbound volumes come as USA crude production hit all-time highs, depressing US prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets. News that both Saudi Arabia and Russian Federation both suggested easing production cuts further added to the sense that the focus for now has turned to one of consolidation. Without compensating supply from other members, this number looks likely to expand as the U.S. reimposes sanctions on Iran and the collapse of Venezuela's oil industry worsens.

"We were in the meeting in Jeddah, when we read the tweet", OPEC Secretary General Mohammad Barkindo said, referring to a meeting in Saudi Arabia on April 20.

"I think the output reduction will not be as significant as many expect", RIA news agency quoted Novak as saying when asked if he agreed with an estimate that the sanctions could remove as much as 800,000 barrels a day from the market. Potential opposition from several producers could complicate the group's effort to reach a consensus when it meets next month in Vienna. While the Saudi's wanted oil at higher levels to facilitate the floating of Saudi Aramco, equally they are hearing the displeasure from the USA about the effect a high oil price is having on their economy - it appears a happy medium could be achieved in the $60-70 range for Crude.

Among other energy contracts, June gasoline fell 1.7% to $2.144 a gallon, while June heating oil lost 1.1% to $2.186 a gallon.

But these higher prices can constrain global economic growth as individuals and companies feel compelled to cut their spending.

The news comes amid reports quoting Russia's and Saudi Arabia's energy ministers as saying they are negotiating a ramp-up of production ahead of the end-2018 deadline.

Steady rise in supermarket fuel prices
Delhi has the lowest fuel price among all metros and most state capital due to lower incidence of local sales tax or VAT. The price of petrol in Kolkata is Rs 81.06/litre and Rs 81.43/litre in Chennai, according to Indian Oil Corporation .

Why Man City Withdrew Interest in Shakhtar Donetsk Midfielder Fred in January
The Reds, like City, also considered Lazio's Sergej Milinković-Savić, but neither club was willing to spend over €100million. With Michael Carrick retiring and Marouane Fellaini leaving, the arrival of Fred signals the start of a new era for United.

Drake blackface photo used by Pusha T to promote new track
The rep added, "If it is in fact Drake's child, which he does not believe, he would do the right thing by the child". Some even suggested new lyrics for Drake's comeback track.

In the past, the increase in prices of this precious commodity was going up due to problems of demand, and the demand was fuelled by large economies such as China, and the market could not really deliver.

The regulation will send demand for middle distillates such as diesel and marine gasoil soaring, and refiners will have to shift some of the products they will be processing from crude oil, analysts concur.

The Saudis also have to balance the geopolitics of oil, striking a balance between their need for relatively high prices against the support of U.S. President Donald Trump in their struggle against regional rival Iran.

In Venezuela the pace of decline of oil production is accelerating and following last week's sham election which saw Maduro regain power the outlook for the country looks incredible dire.

"They want stability in the market", said Slaughter. However, with USA becoming a major exporter of oil, higher oil prices up to a certain level can actually be beneficial with consumer loss being offset by rising capital investments by U.S. oil companies.

Like this: