• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 5 hours One Last Warning For The U.S. Shale Patch
  • 1 hour Modular Nuclear Reactors
  • 10 hours Once Upon A Time... North Korea Abruptly Withdraws Staff From Liaison Office
  • 35 mins Oil Slips Further From 2019 Highs On Trade Worries
  • 10 hours Chile Tests Floating Solar Farm
  • 38 mins Poll: Will Renewables Save the World?
  • 1 day China's E-Buses Killing Diesel Demand
  • 1 day Trump sells out his base to please Wallstreet and Oil industry
  • 21 hours China's Expansion: Italy Leads Europe Into China’s Embrace
  • 32 mins Read: OPEC THREATENED TO KILL US SHALE
  • 2 days Russian Effect: U.S. May Soon Pause Preparations For Delivering F-35s To Turkey
  • 1 day Trump Tariffs On China Working
  • 1 day Biomass, Ethanol No Longer Green
  • 20 hours New Rebate For EVs in Canada
Alt Text

Oil Is Set To Rise, But The Rally May Not Last

The comparative crude oil inventories…

Alt Text

Bearish Economic News Weighs On Crude

News about slowing global economic…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Oil Inches Higher On Saudi, Russian Rhetoric

Crude oil started the week with gains following comments made by the Russian and Saudi Arabian Energy Ministers at their meeting in Oman, reinforcing an overwhelming feeling of volatility on the oil market—something that analysts had been warning about.

Khalid al Falih said that “There is a readiness to continue cooperation beyond 2018...The mechanism hasn’t been determined yet, but there is a consensus to continue,” which most traders apparently interpreted as a possibility that the production cuts that helped boost prices will be extended yet again.

In this context, Alexander Novak’s uncharacteristically extensive comment could have been a kind of a cold shower for the bulls. Here’s what he said: "As for joint coordination on the oil market, the past year has demonstrated that this was a successful and positive experience that can be used in future, if need be. All will depend on expediency and necessity. Any joint actions reach their goals. We have agreed earlier and agreed today that this format of cooperation between OPEC and non-OPEC countries can be used as a consultations format after the deal is over."

Novak demonstrated his usual guardedness against any specific statement ahead of time, and Falih is also his usual self, spreading optimism. It needs noting, however, that the remarks come at the end of a week during which oil prices started sliding as the latest production figures from the Energy Information Administrations rekindled fears about a flood of U.S. crude oil on global markets. Related: This U.S. Lab Could Help Saudis Boost Crude Demand

During the same week, media cited analysts from major banks, including Citi’s Ed Morse, as arguing that Saudi Arabia and especially Russia would rather prices weren’t so high, so it was possible that they would end their deal in June.

These new comments, particularly the Saudi minister’s, point in the opposite direction: why bother hinting at a longer cut if you want prices lower? The truth is that Saudi Arabia needs prices to stay higher: the Aramco IPO is coming in the second half of the year.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment
  • Mamdouh G Salameh on January 22 2018 said:
    This gives the lie to claims by major banks including Citi’s Ed Morse, that Saudi Arabia and especially Russia would rather prices weren’t so high, so it was possible that they would end their deal in June.

    OPEC members particularly Saudi Arabia need an oil price higher than $100/barrel to balance their books and recoup the losses their economies have suffered since 2014 as a result of low oil prices.

    As for Russia, it is less dependent on the oil revenues than the OPEC members as its economy can now live with an oil price of $40/barrel or even less. But Russia still wants the cooperation with Saudi Arabia to continue well beyond the production cut agreement for geopolitical reasons and also to ensure oil price stability in the future.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment




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