Oil climbs on re­port Saudi Ara­bia con­sid­er­ing more ex­port cuts

Muscat Daily - - BUSINESS -

Lon­don, UK - Oil climbed to the high­est level in two weeks fol­low­ing a re­port that Saudi Ara­bia is con­sid­er­ing deeper ex­port curbs.

Fu­tures gained as much as two per cent in New York. Con­sul­tant Petroleum Pol­icy In­tel­li­gence said the king­dom is con­sid­er­ing ad­di­tional ex­port curbs of as much as 1mn bar­rels a day fol­low­ing signs that OPEC’s cut­backs aren’t clear­ing a global glut. Sup­plies from OPEC mem­bers Libya and Nige­ria have re­cov­ered, while Iraq’s com­pli­ance has fal­tered and Ecuador an­nounced it can no longer re­strain out­put while its econ­omy suf­fers.

Libya, ex­empt from a deal be­tween the Or­ga­ni­za­tion of Petroleum Ex­port­ing Coun­tries and its al­lies to shrink a glut, is boost­ing pro­duc­tion as prices in New York lan­guish be­low US$50 a bar­rel on con­cern am­ple global sup­plies will off­set OPEC’s curbs. While no fi­nal de­ci­sion has been made, Saudi Ara­bia is con­sid­er­ing a uni­lat­eral re­duc­tion of its ex­ports to counter the rise in Libyan and Nige­rian out­put, ac­cord­ing to UK-based con­sul­tants PPI.

“We think they are look­ing at op­tions to speed up the re­bal­anc­ing,” Bill Far­ren-Price, founder of PPI, said by phone. PPI’s re­port cited ‘key play­ers in and out­side for OPEC’ for its assess­ment of Saudi Ara­bia’s think­ing.

West Texas In­ter­me­di­ate (WTI) for Au­gust de­liv­ery was at US$46.55 a bar­rel on the New York Mer­can­tile Ex­change, up 53 cents, at 9.57am. To­tal vol­ume traded was about 20 per cent above the 100 day av­er­age. Prices dropped 52 cents to US$46.02 a bar­rel on Mon­day.

Brent for Septem­ber set­tle­ment added 60 cents to US$49.02 a bar­rel on the Lon­don-based ICE Fu­tures Europe ex­change. The con­tract on Mon­day fell one per cent to US$48.42. Prices climbed 4.7 per cent last week. The global bench­mark crude traded at a pre­mium of US$2.24 to WTI.

Libya will par­tic­i­pate in a tech­ni­cal meet­ing with fel­low OPEC mem­bers as well as Rus­sia in St Peters­burg on Sat­u­rady to share the ‘fac­tors en­abling and con­strain­ing Libya’s pro­duc­tion re­cov­ery’, Mustafa Sanalla, chair­man of the Na­tional Oil Corp, said on Tues­day. Sup­plies from Libya have in­creased to 1.1mn bar­rels a day, ac­cord­ing to a per­son fa­mil­iar with the mat­ter.

OPEC mem­ber Kuwait last week said Libya and Nige­ria, an­other coun­try ex­empt from cuts, may be asked to cap their oil out­put amid con­cern about their re­bound­ing pro­duc­tion.

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