Published: Thu, October 12, 2017
Markets | By Rosalie Gross

Oil prices steady as Saudis pump more; OPEC sees strong demand

Oil prices steady as Saudis pump more; OPEC sees strong demand

Goldman added that it expects a modest surplus in 2018, as a marginally smaller increase in USA shale oil output is offset by an acceleration of growth in other non-OPEC supplies as new projects come online, and higher premitted production from Libya and Nigeria.

Saudi Arabia and Russian Federation are now leading consultations between the Organization of Petroleum Exporting Countries and other major suppliers about the future of their agreement to cut oil output, Barkindo said Sunday in New Delhi. "Between the first half and second half this year, demand growth is nearly about 2 million barrels (per day), which is very robust", he said.

In a deal aimed at clearing the glut, Opec is curbing output by about 1.2 million bpd, while Russian Federation and other non-Opec producers are cutting half as much, until March 2018. The cuts have helped revive crude, which had fallen to half its 2014 peak.

"With the market moving into the winter season, distillate fuel supplies are notably tight, representing a change from the excess supplies seen in the last two years", Opec said in the report.

"This news shortly follows the historic visit of the Saudi King to Moscow, and we know that both of these nations are among the highest contributors to global oil production", said Ahmad.

Brent Crude
Daily January Brent Crude

Read: What happens if OPEC maintains current levels of production?

"Although the motive behind the Saudi King visiting Moscow would not have been purely to discuss oil, the combination of the visit with the announcement of further production cuts does help improve sentiment ahead of the upcoming OPEC meeting on 30 November", Ahmad added.

In an unconventional plea to US shale drillers, OPEC's Secretary General Mohammad Barkindo urged North American producers on Tuesday to share the responsibility for drawing down the global oil overhang.

Oil prices also gained support by the International Monetary Fund's prediction that global economic growth is expected to be 3.6% this year and 3.7% next year. The main United States contract, WTI, was at $51.30.

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