Headlines
-
Crude oil price influenced by global sentiment
-
Gold may ease as dollar strengthens
-
Base metals higher across the board
Brent and Distillates
Crude oil prices rose after OPEC agreed to maintain its current production quotas, as confidence in the economic outlook continued to grow and the numbers showed a larger drop in U.S. oil product inventories. However, this morning oil is easing and surrendering some of the previous day's gains.
Weekly U.S. oil inventory data from EIA showed a 1.7mln.b drop in gasoline stocks, more than the 600 kb decline that analysts expected. Also diesel inventories fell 1.5 mln.b, more than the one mln.b. drop that was anticipated, but crude stocks met analyst projections, rising by 1 mln.b.
Yesterday OPEC agreed, to keep its oil production steady saying that won't meet again for seven months (up to October 14 ), underlining the group's confidence that crude prices will remain buoyant.
But OPEC oil ministers also complained that members weren't complying with their quotas. OPEC's recent statistics show compliance now stands at about 53%—from 55.9% in January and 80% in March last year—of the 4.2 MLN.B/D in previously agreed output cuts. That means OPEC is technically producing around 2mln.b/d above its formal production ceiling of 24.845 mln.b./d for its 11 quota-bound members.
Saudi Arabia Oil Minister Ali Naimi told journalists ahead of OPEC's Wednesday production policy meeting that OPEC would not let global oil markets get too tight, an indication the world's biggest crude exporter wouldn't be shy about putting more barrels into the market to quell runaway oil prices. According to Mr. Najmi forward demand cover in developed nations, a measure of the health of supply in the world's biggest oil consumers, has dropped to around 58 days currently from around 62 days. The norm seen in recent years is around 53 to 55 days.
Algerian oil minister Chakib Khelil agreed with his Saudi counterpart Ali Naimi that OPEC may not have to change its current output target this year, though he did not rule out a possible increase in the group's production later this year, putting the chances of such action at 50:50. OPEC provides about 40% of the 86mln.b burned globally each day.
Nigeria would like OPEC to let its output quota adjusted because its current target was agreed at a time when production was hampered by militant attacks on oil facilities.
Iran is seeking 200 bln.$ in oil, gas and refining investments over five years to avoid a production decline, the country's oil minister said in Vienna.
Angola could re-open a bidding round for oil exploration next year, Oil Minister Jose Botelho de Vasconcelos said in an interview.
Russia's Energy Minister said on Tuesday oil companies could end up paying different export duties on East Siberian oil, a sign the finance ministry's fiscal hawks are winning in the debate. A final decision on duties for East Siberian oil is one of the most eagerly awaited by the Russian stock market this year as it can either spur or depress stocks of companies focusing on the region - such as Rosneft or Surgut .
