The Energy Minister of the United Arab Emirates and key figure in the Organisation of Petroleum Exporting Countries (OPEC), Suhail Al-Mazrouei, on Tuesday revealed that he expects the global oil market to be balanced this year, as producers continue to trim production following a 2014 market crash.
Bloomberg reported that OPEC and its allies including Russian Federation may next year ease the crude-output curbs that have helped prices recover from the worst crash in a generation, according to Saudi Arabia's oil minister. And U.S. oil production continues to soar and this is upending oil markets around the world.
Saudi Arabia is committed to meeting its production curb pledge and balancing exports, he said, adding that the nation, the world's biggest oil exporter, will keep overseas shipments in March below 7 million barrels a day.
Saudi Arabia hopes Opec and its allies will be able to relax production curbs next year and create a permanent framework to stabilize oil markets after the current agreement on supply cuts ends this year, Falih said. This agreement is now scheduled to last throughout 2018, although a further meeting to evaluate this plan is expected to take place in June.
US light crude CLc1 is forecast to average $58.88 a barrel in 2018, up from $58.11 in the January poll.
So far in February 2018, US crude oil production has topped 10 million bpd in each of the three previous weeks, EIA data shows.
"Production numbers and rig counts are just as important at this stage, particularly with USA production breaking through the 10 million barrel per day level", said McCarthy.
Analysts said that without a smooth exit from the pact, global inventories may drop sharply and trigger a potentially damaging price rise.
New Delhi World's largest oil company Saudi Aramco is looking to buy a stake in existing Indian refineries and expansion projects as well as the planned giant refinery on the west coast, Saudi Arabian Oil Minister Khalid al-Falih said today. The most active US gasoline futures RBc2 fell as much as 3.1 percent to $1.9354 a gallon.
Mazrouei told the Global Financial Markets Forum in Abu Dhabi that "I am optimistic that this year, we will achieve a market balance" between supply and demand. "U.S. shale growth is very strong, the pace is very strong". Wednesday's release showed weekly production rose again to 10.3 million bpd. Mind you, the US production now stands at highest level since the early 1970s. A stronger dollar makes oil more expensive for holders of other currencies.