Published: Mon, September 24, 2018
Finance | By Loren Pratt

Saudia Arabia and Russia SNUB Trump's call to boost output

Saudia Arabia and Russia SNUB Trump's call to boost output

Commodity merchants Trafigura and Mercuria said that Brent could rise to $90 per barrel by Christmas and even above $100 in early 2019 as markets tighten once USA sanctions against Iran are implemented from November.

OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, on Sunday ruled out any immediate extra increase in output, effectively rebuffing a call by Trump for action to cool the market.

"I do not influence prices", Falih told reporters in Algiers ahead of a meeting of OPEC ministers and allies such as Russian Federation to discuss the situation in oil markets.

Non-member production overall is forecast to rise by 8.6 mbd to 66.1 mbd by 2023 on higher global demand, the report added, but a relative tapering off from 2020 will see cartel members' crude production shrug off a medium-term trend fall, OPEC predicted.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!" he tweeted on Thursday.

The price rises have stemmed mainly from a decline in oil exports from OPEC member Iran due to sanctions introduced by Mr Trump. Trump wrote on Sunday.

Seeking to reverse a downturn in oil prices that began in 2014, Opec, Russia and other allies decided in late 2016 to reduce supply by some 1.8 million barrels per day.

Iranian Oil Minister Bijan Namdar Zanganeh said Iran will definitely veto any decision which threatens its interests.

Word has gotten out that the JMMC, operating beyond its mandate, is to provide a figure for increasing oil supply under the pretext of the so-called "offsetting shortages caused by Iran's Production Reduction'". "Our determination is to institutionalise this cooperation and to get the permanent framework hopefully by December".

Rising crude prices is always bad for oil retailers as it is a raw material for them and aviation companies as oil is a major part of their operational expenses.

The September quarter of the year is typically the strongest for global crude demand, a situation that has been exacerbated this year by the looming reintroduction of economic sanctions on Iran from early November, including the nation's crude exports, contributing to recent strength in prices. "We're looking at $68 [average] for this year and $73 for 2019".

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