Oil prices hit record high
By Nigar Abbasova
World oil prices demonstrated a positive dynamics, as the price of Brent crude oil rose above $51 a barrel hitting an eight-week high amid the hopes that producers could agree on measures to support crude prices.
Brent crude oil October futures were trading at $51.17 per barrel, recording an increase of 0.6 percent ($0.28) on August 19, CNBC reported.
West Texas Intermediate (WTI) crude September futures stood at $48.69 per barrel, facing an increase of 1 percent ($0.47).
The daily basket price of OPEC basket of fourteen crudes stood at $46. 50 a barrel on August 18, recording an increase of $1.26 compared to the previous index of 45.34 fixed on August 17.
Attention of the market is mainly focused on the forthcoming informal meeting of OPEC members in Algeria, which is scheduled for September 26-28. Saudi Oil Minister Khalid al-Falih previously spoke about possible participation of the country in the coordinated actions of OPEC and main exporters to stabilize the market.
Experts say that the participation of Iran in the freeze is a very important point for the conclusion of a joint deal. Analysts also say that Libya and Nigeria, where export is restricted due to on-going armed conflicts , may also call for delay of freeze.
Meanwhile, The Wall Street Journal, citing the representative of Iran’s oil ministry, reported that the country is planning to reach its pre-sanctions level of oil extraction of 4 – 4.2 million barrels per day by the time of the forthcoming OPEC meeting. Moreover, he also said that the country has not yet taken a decision on whether to join the meeting or decline it.
Positive dynamics in the market were also triggered by data on energy stockpiles in the USA. American Petroleum Institute (API) recently reported that the oil reserves in the country have decreased by 1 million barrels in the last week.
The U.S. Department of Energy has declared that commercial oil stocks in the U.S. (excluding strategic reserves) for the week, that ended on 12 August, unexpectedly fell by 2.5 million barrels (0.5 percent) to 521.1 million barrels.
The oil reserves at the country’s largest terminal Cushing fell by 0.8 million barrels to 64.5 million barrels. Gasoline stocks in the U.S. also dropped by 2.7 million barrels (1.2 percent) to 232.7 million barrels. Analysts had expected the index to fall to 1,638 million barrels.
Global oil production continued to grow in July and totaled 95.12 million barrels per day, which is 0.24 million barrels higher that the index of June, according to OPEC estimates. Moreover, oil production in OPEC countries increased by 46,400 barrels per day up to 33.11 million barrels a day in July.
Global demand growth is expected to decline from 1.4 million barrels per day in 2016 to 1.2 million billion barrels in 2017, according to IEA. The forecast for 2017 was cut by 0.1 million barrels per day from last month's report, while the 2016 outlook is unchanged from the last month’s report of IEA.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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