Saudis urge crude oil cooperation

Reuters

Reuters

The number of rigs operating in USA oil fields was down by five at 747 last week, according to oilfield service firm Baker Hughes' weekly report released Friday. The total active USA rig count, which includes oil and natural-gas rigs, dropped by 3 to 936, according to Baker Hughes. It's not growing faster because some consumers are reducing spending on oil because of the higher prices and switching to other types of energy, like natural gas.

Before the meeting of the monitoring committee, Mr Falih said extending the cooperation framework past 2018 does not necessarily mean keeping to individual country production targets.

Crude oil prices inched higher Monday after a top Saudi official said that OPEC should extend its supply quota plan beyond this year.

As the Organization of Petroleum Exporting Countries and allies including Russian Federation gather in Oman this weekend, achievements including a three-year high in oil prices and rapidly dwindling supply glut may be overshadowed by the risk of becoming victims of their own success.

But both Mr Al Falih and Mr Al Mazroui said they did not think the rise in prices would hurt global demand for oil, according to Reuters.

The production limits "are obviously not working all that well if you need that much more time to achieve your objective", John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, by telephone.

But lurking in the background is rising non-OPEC production - which was acknowledged last week by the producer group. If OPEC and its allies maintain compliance with the 1.8 MMBPD oil cuts as agreed to, the market will be rebalanced in 2018, the IEA said, noting a slight surplus in the first half, followed by a modest deficit in the second half of the year.

OPEC economists in their monthly market report for January said the United States is the clear leader when it comes to adding more barrels, with an increase of 62,000 barrels per day previous year.

Opec expects demand for its crude to stand at this year, at 33.1 m b/d - a figure that was downwardly revised from the prior month's report.

The resumption of production from Libya´s Wintershall's As-Sarah oil field was expected to add 55,000 barrels per day to Libya´s output. It also lifted its 2017 global demand estimate to 96.99 million barrels a day and forecast 2018 demand at 98.51 million barrels a day.

Interestingly, the sudden surge in oil prices in the last two months has made the OPEC and Non-OPEC nations anxious about the effectiveness of their strategy to stabilize oil prices.

The agency previously said USA output could reach 10 million b/d in February and 11 million b/d by late 2019.

OPEC made the additional point that United States shale oil companies have managed to lower their break-even costs by up to 50% since oil prices crashed in mid to late 2014 "by improving technology and efficiency".

The dollar index.DXY, which measures the greenback against six rival currencies retreated to near a three-year low, but pared losses as the USA government shutdown appeared poised to end.

Meanwhile, in the USA, crude stockpiles are estimated to have shrunk by 2 MMbbl last week, according to the median estimate of analysts surveyed by Bloomberg.

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