• 4 minutes THE GREAT OIL PRICE PREDICTION CHALLENGE OF 2018
  • 9 minutes Time For Reaction: Trump Presses OPEC to Reduce Prices as Crude Trades Near $80
  • 15 minutes Nothing new in Middle East? Iran Puts On 'Show Of Strength' Military Exercise In Gulf
  • 9 hours So about that psychological oil price ceiling of $80 ... Trump's Twitter sledgehammer is right on cue, again
  • 4 hours China Tariff Threatens U.S. LNG Boom
  • 9 hours Global Hunger Continues to Grow Driven By Climate Change
  • 2 hours Toyota Agreed To Add Android Auto To Its Vehicles
  • 13 hours So oil touched $80! (WTI break $71 twice). What does the future hold?
  • 7 hours Transition Time: Volkswagen Announces "Electric for All" Campaign
  • 3 hours Big Oil Costs Can't Go Much Lower
  • 13 hours WTI now at $70+ headed for $50s
  • 3 hours Google And Facebook Lead Digital's March To Half Of The U.S. Ad Market
  • 1 day Qatar/Germany: 10 billion Euro Investment In Germany's Energy Sector
  • 1 day PetroChina Inks Its Biggest Qatar LNG Deal as U.S. Trade at Risk
  • 1 day Economic collapse? Iran's Khamenei Tells Rouhani, Ministers, To Solve Economic problems
  • 1 day Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
Alt Text

OPEC Outages Are Driving Up Oil Prices

Geopolitics is once again playing…

Alt Text

IEA: Tight Markets To Push Oil Prices Above $80

IEA’s latest monthly oil report…

Alt Text

Hurricane Danger Lifts Oil Prices

Hurricane danger is once again…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

Trending Discussions

Oil Prices Jump As Saudis Cap Oil Supply

pipelines

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:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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