Pradhan Says He Will Ask OPEC For 'Responsible' Crude Oil Pricing

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Due to the staunch opposition to any production increase from the faction led by Iran and Venezuela, analysts expect this week's OPEC meeting to be a very hard one, comparing it to the 2011 meeting, which the then Saudi Oil Minister Ali al-Naimi described as "the worst OPEC meeting of all time", Commerzbank commodities analyst Carsten Fritsch told Reuters.

Iran's representative to OPEC, Hossein Kazempour Ardebili, told Bloomberg on Sunday that "Three OPEC founders are going to stop it".

Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Industry, and President of the Organisation of Petroleum Exporting Countries (OPEC) Conference for 2018, has expressed his optimism over regaining balance to the worldwide oil market, thanks to the cooperation between the OPEC, and its partners.

In addition to Iran, OPEC members Iraq, Venezuela and Algeria said they opposed a production increase despite supply outages in countries such as Libya and Venezuela.

Suhail bin Mohammed Faraj Faris Al Mazrouei, also President of the Organisation of Petroleum Exporting Countries (OPEC) Conference for 2018, was speaking ahead of 174th meeting which kicks off on June 22 in Vienna, Austria.

The historic 24-nation pact has succeeded in its goals of balancing oil markets and lifting crude prices, and the two biggest producers want a relaxation of quotas as soon as next month. On the other side, less privileged OPEC members like Iran, Venezuela, Iraq, Angola, Libya and Nigeria whose production levels have been under pressure by different geopolitical and economic factors like US sanctions and budget deficit need the prices to stay at current levels. Meanwhile, Nigeria's Bonny Light crude oil has maintain an worldwide price of $73.44 per barrel, higher than the Organisation of the Petroleum Exporting Countries (OPEC) basket price of $73.35 per barrel.

The market traded higher on expectations that the production increases could be less than the full 1.5 million bpd, at 300,000 to 600,000 bpd, said Gene McGillian, director of market research at Tradition Energy in Stamford.

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"Oil prices tanked. after Russian Federation and Saudi Arabia all but confirmed a production increase", said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA.

In April-May, oil prices reached their four-year maximum.

There is no incentive for those countries to agree to an increase in OPEC's production because they have no capacity to respond to one. Several OPEC countries are not able to increase the production.

Chinese tariffs on United States energy exports would affect roughly one of every four barrels of oil the U.S. now ships to overseas refiners and, if ultimately imposed, would spark a significant shift in global crude flows, analysts said Monday.

While a compromise may be necessary to overcome vocal opposition from Tehran, Baghdad and Caracas, it could mean the resulting supply boost is smaller than oil traders - or indeed the U.S. President Donald Trump - had been anticipating.

Despite potential downward pressure from large producers increasing output, Goldman Sachs maintained its bullish outlook. The risk is that Saudi Arabia will choose to go it alone, boosting output.