• 4 minutes "Natural Gas Trading Picks Up Considerably Amid High Volatility" by Charles Kennedy - ...And is U.S. NatGas Futures dramatically overbought at the $6.35 range?
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 18 hours Revisiting: "The U.S. Grid Isn’t Ready For A Major Shift To Renewables" from March 2021 by Irina Slav at OILPRICE
  • 3 days How cheap Chinese tires might explain Russia's 'stalled' 40-mile-long military convoy in Ukraine
  • 8 days "The Calm Before The Storm In Oil Markets" by Tom Kool of OILPRICE and seen at YahooFinance
  • 8 days Will Variants and Ill-Health Continue to Plague Economic Outlooks?
  • 1 day Natural Gas is the Cleanest and most Likely Source of Energy to Fuel the World.
  • 8 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 7 days "Russia will stop 'in a moment' if Ukraine meets terms - Kremlin" by Reuters via Yahoo News...but Reuters suddenly cut out the balanced part of the story.
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Oil Prices Jump As Saudis Cap Oil Supply

Oil prices jumped early on Tuesday, after Saudi Arabia reported that it had cut its crude oil production in July compared to June, in a move seen as an attempt to avoid another glut that could put downward pressure on the price of oil.

At 10:07 a.m. EDT on Tuesday, WTI Crude was up 1.28 percent at $68.06 and Brent Crude was trading up 1.43 percent at $73.65, ahead of API’s U.S. inventory report later today.

Despite its earlier pledge to boost crude oil supply to offset supply disruptions, Saudi Arabia’s oil production in July slipped by 52,800 bpd from June to average 10.387 million bpd last month, according to the secondary sources in OPEC’s closely watched Monthly Oil Market Report published on Monday. Saudi Arabia’s self-reported figure pegs the drop at 200,000 barrels per day for the month.

Analysts believe that one reason for the lower production in July was that Saudi Arabia didn’t see demand for its crude oil as high as it had expected earlier.

In the middle of July, Saudi Arabia’s OPEC governor Adeeb Al-Aama said that the Kingdom would see its July exports drop by around 100,000 bpd as it was unwilling to push the market into oversupply beyond the customers’ needs.

In its latest report, OPEC revised down demand for the cartel’s crude oil for next year, and revised slightly down its estimates for global oil demand growth compared to the previous month’s report.

Discussing oil prices in July, OPEC said in the Monday report:

“Brent flipped into contango with activity running low amid a perceived rise in oil supply and increasing floating storage levels in Europe.”

Contango—the market structure in which front-month prices are lower than prices out in the future months—points to an oversupply and makes storing oil for future sales profitable. Related: The Real Reason Behind The Next Oil Squeeze

There are a lot of unsold crude oil cargoes around the Atlantic Basin and traders find it hard to place crude from floating storage, traders told Reuters this week. Some two-thirds of the Nigerian crude for loading this month and next is still unsold, and the premiums for Nigerian crude grades to dated Brent have been slipping in recent days.

So Saudi Arabia’s production cut for July could be a sign that the Kingdom wants to avoid another glut.

“We do not think that Saudi Arabia is interested in seeing Brent crude below $70 a barrel,” SEB commodities analyst Bjarne Schieldrop told Reuters on Tuesday.

By Tsvetana Paraskova for Oilpice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News