• 3 minutes Natural gas is crushing wind and solar power
  • 7 minutes OPEC and Russia could discuss emergency cuts
  • 11 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 2 hours So the west is winning, is it? Only if you’re a delusional Trump toady, Mr Pompeo, by Simon Tisdall
  • 2 hours Fight with American ignorance, Part 1: US is a Republic, it is not a Democracy
  • 1 min Blowout videos
  • 15 hours Question: Why are oil futures so low through 2020?
  • 30 mins Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 5 hours CDC covid19 coverup?
  • 7 hours Charts of COVID-19 Fatality Rate by Age and Sex
  • 1 hour The Arithmetic Of Fracking
  • 15 hours Shorting Gold
  • 6 hours “The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy
  • 1 day Peak Shale Will Send Oil Prices Sky High
  • 1 day Phase One trade deal, for China it is all about technology war
  • 2 days Step Forward: Trump Says U.S.-China Trade Deal Will Be Signed On January 15
Alt Text

What Will Oil Prices Do After The Coronavirus?

The coronavirus outbreak in China…

Alt Text

Reinstating An Oil Export Ban Would Be A Disaster For The U.S.

Liberal presidential candidates are calling…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Crude Oil Stocks Rise Despite U.S. Sanctions

Crude oil inventories in the world are rising despite U.S. sanctions, which have affected Venezuelan and Iranian production, Saudi Arabia’s Energy Minister Khalid al-Falih said, as quoted by Reuters, at a briefing in Baku where OPEC is meeting with its production cut partners to discuss future steps.

According to Falih, it’s U.S. production that is more than offsetting the decline in Venezuela and Iran. Unsurprisingly, Falih once again said the cuts may need to extend beyond April and even into the second half of the year.

“My assessment is that the job still remains ahead of us... We are still seeing inventory builds... We need to stay the course certainly until June,” the official said, adding “We like to remain ready to continue monitoring supply and demand and do what we have to do in the second half.”

OPEC and its partners led by Russia agreed to remove 1.2 million bpd from global supply in December in a bid to prop up falling prices. Although Saudi Arabia has been cutting more than agreed, like last time, compliance has not yet reached 100 percent. As of February, it stood at 89 percent, an improvement from 83 percent for January. Iraq and Nigeria were behind the lower compliance rate as they produced more than they had agreed to.

Saudi Arabia, Al-Falih said earlier this month, will continue pumping 9.8 million bpd in April as it plans to do this month, which is lower than what it agreed to produce under the December agreement. If it decides to maintain this production rate beyond April, however, this might rekindle concern about insufficient supplies. Related: Oil Markets In Limbo Ahead Of OPEC Meeting

Interestingly, Goldman Sachs said early this month it expected the cartel to clear up the supply overhang by April, which would make it unnecessary to continue producing less until June.

Goldman’s commodity chief Jeffrey Currie told CNBC, "OPEC is pursuing a shock and awe strategy," cutting production faster and deeper than the investment bank expected. This suggests that supply will tighten sufficiently by April for OPEC to call the mission accomplished.

After that, Currie said, OPEC will probably take a month or two to announce how it will proceed with dialing back the cuts and this would discourage U.S. producers from boosting their own production further, bringing about another price crash.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage




Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News