Saudis Signal Oil Output Boost

OPEC and Russia to Raise Crude Oil Output

OPEC and Russia to Raise Crude Oil Output

Most nations in the agreement weren't consulted about the Saudi-Russia policy to revive output. "These figures will be discussed in late June, at the ministerial meeting", Novak said at the St. Petersburg International Economic Forum (SPIEF) session, commenting on the volume of possible increase in the oil production.

Meanwhile, Brent crude fell $2.42, or 3.1 percent, to $76.37.

OPEC has been cutting crude output by 1.8 million bpd to prop up oil prices.

Oil dropped more than 4% on Friday after reports suggested OPEC and other supply-cutting countries led by Russian Federation could begin easing output caps. The U-turn scrambled the outlook for oil markets, hit the share prices of oil majors and shale producers and set up a diplomatic wrangle with other members of the Organization of Petroleum Exporting Countries.

A decision, which will relax production curbs that have been in place for 17 months, could be finalised at a meeting of major oil producers in Vienna on June 22-23, Reuters reported.

"The United States wants Europe to buy the US liquefied natural gas, the price of which is at least 30-40% higher", he said, adding that the US LNG is "uncompetitive as of today".

While the producers were determined just a month ago to keep supply restrained and boost prices, they're now changing course as oil's surge to a three-year high puts strain on the global economy and draws political heat from major consumers, notably the USA, reported Bloomberg.

Prices were also held back by geopolitical concerns, including impeding USA sanctions against Iran, which produces 4% of global oil supplies.

It is likely the reductions will end in the second half of this year, he said. The most important sanctions would be those concerning Iran's oil sales and energy sector investment as well as transactions with the Central Bank of Iran (CBI).

The rapid decline in oil inventories and worries about supplies after the USA decision to withdraw from the worldwide nuclear deal with Iran, as well as Venezuela's collapsing output, were behind the change in OPEC's thinking according to our sources.

But Dan Pickering, head of the asset-management arm of Tudor, Pickering, Holt & Co., said OPEC's move could remove uncertainty about when OPEC will bring more production online, potentially clearing the way for another rally.

Managing Director Ali Kardor said Iran is exporting almost 2.5 million barrels of crude oil on a daily basis.

Oil prices fell on Friday as Opec and Russian Federation considered easing supply curbs to offset disruptions in Venezuela and an expected drop in Iranian exports.

Saudi Arabia has recently shown willingness to push prices higher to bankroll domestic economic reforms and underpin the valuation of its state oil company in a planned initial public offering.

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