Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.
Oil market overview
2019-11-11 • Updated
Oil prices dropped to $51.10 after Baker Hughes total US rig count posted an increase in total rigs and Saudi Arabia Energy minister Al-Falih said the country will no longer tolerate the loss of its market share.
US drillers added 14 oil rigs according to the data we received on March 17, bringing the total count up to 631. Growing US shale production fed concerns that an output cut deal propelled by the OPEC-members and supported by large oil suppliers is having less impact than it was expected.
Another headwind for oil prices was the news that Libya’s National Oil Corporation is going to regain its control over key oil ports (from Reuters report). This should boost the country’s oil export. Libya is not a contracting party of the production cut deal forged in November. So, market analysts believe that higher output in Libya will be an additional drag on the oil futures.
Some analysts, however, expect the oil prices to rise higher as they believe that cuts in OPEC production will start to show up only between the mi-March and mid-April. A sharp reduction of oil imports is expected, it will inevitably lead to impressive crude inventory draws. The mix of falling imports and shrinking stockpiles of oil should send the oil price to the upside.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
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