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Rosneft CEO Igor Sechin says the recent rise in oil prices is due to a weak dollar, instead of efforts by rival OPEC to combat the global crude supply glut.
He went so far as to say the bloc’s November agreement has had “no effect” on the crude market since implementation began.
"The Americans support their shale oil producers through dollar depreciation. I believe that the OPEC deal has no impact on the market, it is the dollar devaluation," Sechin added.
There is speculation that the deal might be extended for another three or six months during OPEC’s next meeting at the end of November. Riyadh is keen on getting oil prices to rise before the initial public offering of its oil company, Saudi Aramco, next year.
"If it [Saudi Arabia] goes for the listing, they will be interested in higher prices and will probably encourage their OPEC partners to extend it. If they don't, they will be less interested."
While the latest sign that Saudi Arabia is indeed committed to doing whatever it takes to help the oil market rebalance should be a positive one for market participants, prices continue to be depressed. They are still below the $55 per barrel from last December despite a recent Reuters survey that suggested compliance among OPEC members had risen to 89 percent and that estimated OPEC crude oil output had fallen by 170,000 bpd in August. The precariousness of OPEC’s position was highlighted by the effects of Hurricane Harvey, which apparently provided enough of a counterweight to the positive potential of these figures.
Despite the decline in OPEC crude oil exports, oil prices continue to falter, with WTI losing 6 percent over the month of August. At the time of this article’s writing Brent traded down 1.3 percent at $53.78.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…