Oil on track for weekly gain as OPEC+ set to confirm supply cut


6/12/2019 15:28:00
Print
     .

Oil prices steadied on Friday and were set for weekly gains ahead of a meeting of OPEC and its allies later in the day which is expected to formally agree to more output cuts in early 2020.

 

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - a grouping known as OPEC+ - agreed on Thursday to more output cuts to avert oversupply as economic growth stagnates amid the U.S.-China trade war.

 

But OPEC stopped short of pledging action beyond March and analysts have questioned the impact of the latest curbs.

 

Brent futures LCOc1 were down 3 cents at $63.36 by 0950 GMT but are set to rise 1.5% on the week.

 

West Texas Intermediate oil futures CLc1 fell 9 cents to $58.34 a barrel. They are set to rise nearly 6% on the week.

 

The cuts next year will expand the existing agreement by an extra 500,000 barrels per day (bpd) reduction in the first quarter next year, through tighter compliance and some adjustments. OPEC’s current agreement is a supply cut of 1.2 million bpd and the increased amount represents about 1.7% of global oil output. 

 

“If we were to have an outcome of an extension of cuts with only the official quota of the OPEC+ group being reviewed lower (the 500,000 bpd), rather than actual production, then the change in supply policy would be cosmetic (given below target production in some countries, notably Saudi Arabia and Angola),” said Harry Tchilinguirian, global oil strategist at BNP Paribas.

 

OPEC is likely to shoulder 340,000 bpd in fresh cuts and non-OPEC producers an extra 160,000 bpd, one source said on Friday.

 

Any price gains from the OPEC+ output cut are likely to benefit American producers not party to any supply curbing agreement. American drillers have been breaking production records even as they cut the number of oil rigs in operation, filling gaps in global supplies.

 

“North American shale supply will continue growing even in an environment with lower oil prices,” Rystad Energy said in a note.

 

Higher oil prices are also supporting the initial public offering of Saudi Arabia’s state-owned oil company, Saudi Aramco, which priced its shares on Thursday at the top of an indicated range.

 

The sale was the world’s biggest initial public offering (IPO), beating Alibaba Group Holdings’ $25 billion listing in 2014, but fell short of a $2 trillion valuation for Aramco sought by Saudi Crown Prince Mohammed bin Salman.

 

Foreign investors stayed away and the sale was restricted to Saudi individuals and regional investors.

 

 

 

PUKmedia / Reuters


 

Commemoration of 3 Kurdish activists shot in Paris


Thursday, Kurds saluted the seventh anniversary of the assassination of 3 Kurdish women activists in France.

 

The crime took place on January 9, 2013, targeting 3 female Kurdi...


»  3 Kurdish girls die in a fire in Norway
»  Kurdish teenager plays for several European football clubs
 

Susan Rice: U.S. has ‘sold out the Kurds’ with Syria move


Susan Rice, former U.S. ambassador to the United Nations and national security adviser in the Obama administration, joined Judy Woodruff on PBS NewsHour and discussed the Trump administration&rsquo...


»  INTERVIEW: Kurdish leader Ilham Ahmed on security in North and East Syria
»  A political analyst: The subject of the disappeared will be raised for electoral campaigns
 

Coronavirus is controllable, Chinese Foreign Minister says


China has announced a drop in new cases from the coronavirus outbreak for a third consecutive day.

 

On Sunday, authorities reported 2,009 new cases and 142 more deaths nationw...


»  Munich Security Conference: NATO secretary general defends trans-Atlantic ties
»  Remembering President Mam Jalal's historical pleading

Caricature