• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 1 day GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 8 days America should go after China but it should be done in a wise way.
  • 1 day Even Shell Agrees with Climate Change!
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 3 days World could get rid of Putin and Russia but nobody is bold enough
  • 6 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Oil Prices Set to Rise as Global Stock Refills Ramp Up

Oil Prices Set to Rise as Global Stock Refills Ramp Up

China's increased oil inventory building,…

Traders Cautiously Optimistic About Crude

Traders Cautiously Optimistic About Crude

In the forthcoming week, traders…

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

Saudis Need Deeper Cuts To Sustain $60 Oil

With market sentiment pessimistic about oil demand growth and with rising U.S. crude oil production, Saudi Arabia needs to take action sooner rather than later to support oil prices at least around US$60 a barrel Brent, IHS Markit said in an analysis on Thursday.

Although OPEC’s largest producer and de facto leader Saudi Arabia has been cutting much more than required under the OPEC+ deal, oil prices have lingered well below the reported breakeven price for Saudi Arabia –around US$80 a barrel.

Brent Crude slipped below US$60 per barrel last week, after the U.S. and China escalated the trade war, rekindling fears of slowing global economic and oil demand growth.

Despite losses of barrels from Iran and Venezuela due to the U.S. sanctions, OPEC may have to cut its production by another 1 million bpd “for prices to be supported close to 60 USD per barrel for long,”

Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade, at IHS Markit wrote.

This view is shared by other analysts.

In the current gloomy market sentiment, OPEC would need to deepen the production cuts by 1 million bpd if the cartel wants to move up the price of oil, Emma Richards, senior industry analyst at Fitch Solutions, said two weeks ago.

Saudi Arabia would need to take action to support oil prices at above $60 a barrel, all the more so because the Kingdom would need as high a price as possible in view of the listing of its giant oil firm Aramco, Katsoulas said.

One key uncertainty in a Saudi plan to take a more decisive action to boost oil prices could be how willing Russia would be to continue its cooperation with OPEC in the production cut deal, IHS Markit’s analyst added.

“Russia’s participation can’t be taken for granted, even if President Vladimir Putin seems to value the relationship established with OPEC, as several Russian companies already face difficulties due to the production cuts,” Katsoulas noted.

ADVERTISEMENT

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • JOSEPH HALL on August 29 2019 said:
    So Saudi Arabia needs to cut production of its oil, to sell its oil at a certain price, which means not selling its oil so that the oil it does sell is a certain price, but not too much oil so that price doesn’t go down, so it needs to cap production of its oil to sell the oil it does sell at a certain price?

    Riddle me this, how much longer can this frickin’ nonsense go on?
  • John Di Laccii on August 30 2019 said:
    No worries, hopefully Saudi Barbaria will go down the drain with this. Houthis shoud continue further bombing of Ghawar and other oilfields to help them to decapitate themselves by the end of this year. Everyone knows who is behind Muslim Brotherhood and ISIS.
  • John LaRue on August 30 2019 said:
    This has been going on for almost 100 years since the Texas RRC began putting allowables on wells in an attempt to balance supply and demand and get oil above 50 cents per bbl. Now the US is again the worlds largest producer will production unregulated and flat out. Russia and Saudi Arabia are left to do what we used to do, balance world supply and demand.

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