Oil prices fell the most in 11 months in NY as Saudi Arabia said it expects OPEC and its partners to boost supplies later this year, easing restraints intact since early 2017. Saudi Arabia needs prices above $80 a barrel to balance its budget, Mr. Tran said.
WTI oil (USD 72/bbl) prices might move lower towards Dollars 66 while MCX oil prices (CMP: Rs 4890/bbl) might move lower towards Rs 4700 in a month time frame.
Saudi Arabia says OPEC and Russian Federation could supply more oil to world markets "in the near future" to make up for a collapse in Venezuelan output and the impact of United States sanctions on Iran, reported CNN.Speaking during a panel discussion hosted by CNNMoney's Emerging Markets Editor John Defterios, Saudi energy minister Khalid Al-Falih said he was engaged in intensive discussions with Russian Federation and other OPEC officials about how to balance the oil market. The S&P 500 energy index is having its worst week since early February.
This comes even as USA crude production has risen.
Markets have been jittery this week as the USA president had warned in recent days that he could cancel the summit, while also voicing his displeasure at a deal to avert a trade war with China and threatening tariffs on vehicle imports. According to analysts, oil refiners... "I would say we're perfectly happy with $60 a barrel". "There seems to be just enough crude and it's all finding a home to go to".
Saudi Arabia and Russian Federation are discussing raising OPEC and non-OPEC Crude Oil production by some 1-M BPD. The International Energy Agency, which advises major consuming nations, said last week that the supply glut is gone and high prices are starting to hurt demand.
U.S. West Texas Intermediate (WTI) crude futures were at $70.44 a barrel, down 27, or 0.4 percent, cents from their last settlement.
After al-Falih's comments, made following a meeting with his Russian counterpart in St. Petersburg, saw crude drop more than $3 today to below $67 a barrel in NY. The global benchmark lost about 2.7% this week, its largest weekly drop since early April.
The discount of WTI to Brent hit US$8.53 per barrel, its widest since May 17, and not far off levels last seen three years ago. Prices are down 1.9 percent this week. That market escalation coincided more or less with volatility in equities markets that sparked concern from US and European federal bank chiefs.
At an economic forum in St. Petersburg, Russia, OPEC's Secretary-General Mohammad Barkindo said Friday the discussion by OPEC to increase supplies followed Trump's tweet.
"With oil prices rising more than costs, average industry profitability has turned positive this year", Bernstein Energy said in a note this week, adding that the 50 largest listed oil companies globally "need $47 per barrel oil prices to break even in aggregate".
USA crude oil production has risen by more than a quarter in the last two years, to 10.73 million bpd.