USA oil output to grow again this year: Opec

Darnell Taylor
May 15, 2018

“But it is still far from certain that they will bite in the way intended. Price is another matter", he said."Iran, which is one of the main sour crude suppliers of the Mediterranean basis, provide Saras with crude. "Oil prices could rise at least $10 (a barrel), with Brent approaching near $90", Akuta said.

The biggest buyer of Iranian oil in the wider European region is Turkey, with sources saying Turkish demand is likely to be strong despite the sanctions due to its close relations with Iran.

OPEC on Monday forecast that US drillers will account for most of the growth in oil production this year but warned that the global economic growth picture is clouded by uncertainty, in part due to American trade policy and sanctions. Historically, the negative consumption response dominated the increase in oil investment.

West Texas Intermediate crude for June delivery traded up 11 cents at $70.81 a barrel on the New York Mercantile Exchange at 8:40 a.m. local time.

Oil prices on Monday fell away from last week's multi-year highs as a relentless rise in USA drilling activity pointed to increased output, while resistance emerged in Europe and Asia to US sanctions against major crude exporter Iran, Reuters reports.

Markets have generally tightened as the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, has been withholding supplies since 2017 in order to push up oil prices.

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Prices maintained support, however, from tight supply and planned USA sanctions against Iran that are likely to restrict crude oil exports from one of the biggest producers in the Middle East.

Oil and gas prices are likely to surge if President Donald Trump takes the USA out of a 2015 nuclear agreement with Iran.

United States refinery utilisation increased to 92.2 per cent in April from 91 per cent in March, negatively impacted the Singapore gross refining margin (GRM), which declined to $6.6 per barrel against $7.5 per barrel in March.

All key crude oil futures contracts saw traded volumes jump as speculators took on new positions in the hope of profiting from rising prices while refiners hedged to protect themselves from higher feedstock oil prices.

OPEC has an adequate "buffer" of potential production to offset barrels lost from a re-imposition of Iranian sanctions, he said in an interview with Bloomberg Television.

President Trump announced last week that America would withdraw from the "decaying and rotten" deal with Iran, choosing instead to impose sanctions on the Middle Eastern country. Prices struggled for direction on Thursday, resulting in a Doji candle, and closed lower on Friday. Further, higher incremental liquefaction capacity of almost 40 million tonnes in the next 2 years, we expect spot LNG prices to soften to $6-7/mmbtu in near to medium term.

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