OPEC and non-OPEC dedicated to restoring OIL market stability

Bringing global inventories down

Mohammad Barkindo, OPEC secretary-general, saying that all OPEC and non-OPEC oil producers are taking part in a bringing the global stability to the Oil market.

Speaking in the UAE, he said agreement data in March is showing better conformity by the oil producers than in February.

“OPEC and non-OPEC producers agreed in December to cut supplies for six months. Helping lift oil prices to about $55 a barrel after a two-year slump. OPEC will review policy for the second half of this year at a May 25 meeting.”(Reuters)

Any decision taken in this field would be brought up to maintain good interest of all producing and consuming countries. He didn’t say whether the agreement would be extended for another half year. But he promised all the resolutions will help the OIL market stability.

Oil market Facts

Oil steadied on Wednesday. After OPEC said it was committed to eroding a global supply. Overhang that has dogged markets since 2014, but with U.S. output and inventories rising, analysts said prices looked vulnerable. (Yahoo finance)

The oil price got an early lift from comments by Mohammad Barkindo.

Brent crude futures LCOc1 were up 5 cents at $54.94 a barrel at 0908 GMT, while U.S. West Texas Intermediate (WTI) futures CLc1 were up 3 cents at $52.44 a barrel.

“Is sentiment on the oil market now taking a negative turn again? Looking at the latest price reactions, one might conclude that the only reason for the previous price rise was the expectation of further production cuts on the part of OPEC,” (Commerzbank strategist Carsten Fritch’s comment.) (Reuters)

“After all, the oil price is dismissing reactions to the factors which would normally sustain it. Ever since the Saudi oil minister (Khalid) al-Falih put at least something of a dampener on such expectations.”

OPEC and other producers such as Russia have agreed to cut output by almost 1.8 million bpd during the first half of 2017.

U.S. Impact on oil supplies

Speaking about politics, U.S. President Donald Trump ordered examination of whether the elevation of sanctions against Iran was in the United States’ national security interests.

Most of U.S. sanctions against Iran were lifted in late 2015 under a nuclear deal. Letting Tehran to more than double its crude exports over 2016. This move just added a bit to the global oversupply.

U.S. markets remain heavily oversupplied, as well as the global markets.

Although crude inventories fell by 840,000 barrels in the week to April 14 to 531.6 million barrels. They held near record highs, while gasoline stocks rose by 1.4 million barrels as refinery runs increased by 334,000 bpd.

Solving the problem

“Unless the (EIA) data shows something drastically different, this report should cause a severe dent in the bullish case (for oil prices),” said Sukrit Vijayakar, director of energy consultancy Trifecta. (Reuters)

Restoring the OIL market inventories and the unlikely trends which are increasing every day would be a serious deal. The enormous supplies of oil from U.S. part, and the prices downward trend in global markets are making a fuss and ruining the stability of this resource.

It is represented as a huge problem, as well as on global level, mainly for OPEC countries. Whose aim is to control their oligopoly over Oil supplies.