Published: Sun, June 17, 2018
Markets | By Noel Gibbs

OPEC Faces Key Test at Upcoming Meeting

OPEC Faces Key Test at Upcoming Meeting

Oil prices ticked higher Thursday after data showed a decline in USA petroleum inventories.

But it's more complicated than that.

"Prices will be above $150 in less than two years", he tweeted on Wednesday.

Top exporter Saudi Arabia - which has so far led OPEC's efforts to withhold supplies - is also showing signs of raising production. "Not good!" he wrote on Twitter.

"To make up for the losses, we estimate that Middle East OPEC countries could increase production in fairly short order by about 1.1 mb/d and there could be more output from Russian Federation on top of the increase already built into our 2019 non-OPEC supply numbers", it added.

In the letter, the senators said a run-up in oil prices is "effectively a tax on every American family's discretionary budget" since the price of oil directly affects the price of gasoline.

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US crude production rose to 10.9 million bpd last week, according to the EIA, but Kilduff said the market appeared able to absorb the increase.

Exxon Mobil (XOM) shares closed down 1.1% at 81.51 on the stock market today. Flynn compared that to eliminating the fourth-largest oil producer in the world.

The firm's parent, Oil and Natural Gas Corp (ONGC), in a regulatory filing, said Venezuela had not paid OVL $449 million (about Rs 3,305 crore) of accrued dividend for four years.

"We expect OPEC will agree to raise output and other non-OPEC countries party to the Declaration of Cooperation to follow suit", Britain's Barclays bank said on Thursday. This is India's third attempt to unite major Asian energy importers to beat the producers' cartel.

Opec spent the past few years attempting to push up the price of oil following its collapse in 2014 when the price plunged from more than $115 a barrel to hit a low below $30 a barrel in early 2016. "At current prices US oil producers are still losing money". Using drilling advances such as fracking, operators in Texas and North Dakota have pushed US production higher.

US crude output has risen nearly 30 percent in the last two years to a record high of 10.9 million barrels per day. Iran and Venezuela - both subject to USA sanctions - have written to fellow Opec members urging unity against American pressure.

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The 14-country bloc's next meeting is June 22, when ministers will gather in the Austrian capital amid speculation that Saudi Arabia may push for more flexibility on production quotas in anticipation of sustained declines in Venezuela and the impact of U.S. sanctions on Iran.

In April, Trump also tweeted: "Looks like OPEC is at it again".

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.

OPEC is under scrutiny in Congress, too. The committee chairman, Rep. The measure now goes to the full House. A weekly market report from USA motor club AAA said the national average retail price for a gallon of gasoline was at a point where consumers may be changing their habits.

Consumers say more oil is needed. In May, oil supply increased in the US, Canada, Brunei, Brazil, Kazakhstan, Azerbaijan, and Ghana month-on-month, while declines in production were seen in Mexico, Norway, the UK, Australia, Colombia, Egypt, and China.

Democrats are trying to blame Trump for higher gasoline prices, sensing the issue will resonate with voters in the November midterm elections that will determine control of the House and Senate. Saudi Arabia supported Trump's decision to exit the Iran nuclear agreement.

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Well, so is our presence in South Korea, with 28,000 troops, 50,000 more in Japan, and the Third Marine division in Okinawa. Whatever agreement exists lives only in the imaginations of President Trump and Secretary of State Mike Pompeo .

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