World crude prices rise

20 July 2018 16:35 (UTC+04:00)

By Sara Israfilbayova

Prices for “black gold” of reference marks in the course of trading are rising after the statements of the delegate of Saudi Arabia to OPEC that world oil reserves in the second half of the year will fall significantly.

Brent oil had climbed 0.4 percent, to $72.85 a barrel, U.S. West Texas Intermediate (WTI) crude was up 0.4 percent, at $69.79 a barrel, according to Reuters.

Investors are playing back the statements made by the head of the technical committee on monitoring the implementation of the OPEC+ agreement and concurrently with Saudi Arabia’s OPEC delegate Adeeb Al-Aama that despite the good balance of the international oil market in the third quarter, in the second half of the year there will be a significant reduction in stocks due to a stable demand for raw materials and seasonal factors.

The U.S. Energy Information Administration (EIA) reported that on July 18 the production of U.S. oil reached 11 million barrels per day for the first time. Since November, the country has increased production by almost one million barrels per day, thanks to the rapid growth of shale production.

Perhaps the production in the U.S. will grow even more, Rystad Energy said.

Gasoline stocks in the U.S. fell by 3.2 million barrels last week, while distillate stocks, including diesel and heating oil, fell by 371,000 barrels, the AEI said.

Last month, Saudi Arabia sharply increased production, growing oil supplies to world markets by 390,000 barrels per day to 7.6 million barrels per day. This is the highest increase since the end of 2016, according IEA.

OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.

OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.

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Sara Israfilbayova is AzerNews’ staff journalist, follow her on Twitter: @Sara_999Is

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