OPEC struggles to deliver on pledged oil output boost

Anna Jefferson
October 22, 2018

Crude prices fell sharply Thursday, with the US benchmark tallying a two-day drop of more than 4% following a fourth straight weekly climb in crude inventories that has seen domestic supplies swell by a total of 22 million barrels over that period.

Global benchmark Brent crude has fallen nearly US$8 per barrel since reaching a four-year high of US$86.74 on Oct 3, weakened by lower forecasts for global economic growth as the United States and China impose tariffs on billions of dollars of each others' goods.

Analysts say the Organization of the Petroleum Exporting Countries and partner Russian Federation appear unlikely at this point to respond immediately to Trump's demands, while U.S energy secretary Rick Perry has also ruled out using USA strategic crude reserves as a means of lowering the price.

The EIA report indicated a massive decline of crude exports by 1.8 million barrels per day, which is characterized as bearish by the agency.

At its 2018 peak in May, Iran exported 2.71 million bpd of crude oil, equivalent to almost 3 percent of daily global consumption.

Saudi officials say Jamal Khashoggi died in a "fist fight"
Asked if he thought MBS was behind the killing, a fellow Republican, Senator Bob Corker, told CNN: "Yes, I think he did it. Trump emphasised as he has before how important the US-Saudi relationship is to Washington's regional strategic goals.

USA lawmakers pointed at the Saudi leadership over the disappearance and suggested sanctions could be possible.

"On the Iran issue and the issues growing out of the USA withdrawal from the JCPOA, again we are engaged with all stakeholders in this matter", spokesperson Kumar said.

At the same time, USA production under the Trump administration is reaching new milestones.

But those who are against the idea, say once we have not still resolved the problems and weaknesses in the stock trades, how can we set up a new proper ground for offering oil in this market?

President Donald Trump's looming sanctions on Iran are the biggest in a series of mysteries confronting the oil market right now.

$450 Billion in Investments at Stake in Saudi Crisis, Trump Says
Khashoggi has not been seen since he entered the Saudi embassy on October 2. "We are saddened to hear confirmation of Mr. The announcements came in a flurry of statements carried by the state-run Saudi Press Agency early Saturday morning.

In this context, the production cuts and embargo made an already tight market worse, sent oil prices surging, and produced a huge, short-term revenue windfall for Saudi Arabia and other oil producers.

NEW YORK, Oct 19 (Reuters) - Oil prices rose on Friday on signs of surging demand in China, the world's No. 2 oil consumer, although prices were headed for a second weekly decline on swelling us inventories and concern that trade wars were curbing economic activity.

While traders had largely ignored the potential for U.S. -Saudi tensions to prompt the kingdom to restrain output earlier this week, concerns in the wake of Trump's latest statement appeared to give crude a lift, Stewart Glickman, energy equity analyst at CFRA, told MarketWatch. The latest news in this due came on Tuesday, when National Iranian Oil Company (NIOC)'s Managing Director Ali Kardor announced that offering crude oil at Iran Energy Exchange (IRENEX) will be commenced on October 28 to thwart US sanctions.

"Despite the bullish talk, Saudi Arabia is very unlikely to pick the oil market as a means for retaliation", said Norbert Ruecker, head of macro and commodity research at Julius Baer Group Ltd.in Zurich.

Oil had been rising this week on worries about Iranian sanctions and tensions between the United States and Saudi Arabia after the death of Saudi journalist Jamal Khashoggi.

Gold prices hold steady as investors wait for Fed minutes
The greenback slightly extended the previous day's gains against a basket of its rivals on the Fed's perceived hawkish stance. This is mostly because of the central role the Dollars plays in the global economy because it acts as the reserve currency.

"We're meeting every single demand for barrels", Al-Falih said at the time.

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