Oil Prices Fall on Rising Global Production

Russian Federation is showing signs of weakening its commitment to oil-supply cuts as production rises before crucial talks with OPEC about the future of the agreement. The figures were first reported by Interfax.

Benchmark Brent crude was down 15 cents at $76.31 a barrel by 0915 GMT.

U.S. West Texas Intermediate (WTI) crude futures were down 21 cents, or 0.3 percent, at $65.52 a barrel.

That implies USA crude output, already at a record high of 10.8 million barrels per day (bpd), will rise further.

A senior USA official had called Saudi Crown Prince Mohammed bin Salman before President Trump announced his decision on the Iran nuclear deal, to make sure that the United States could count on OPEC's largest exporter and de facto leader Saudi Arabia to keep prices stable, because Washington was concerned that the sanctions could drive oil prices up.

"Sentiment is caught in a tug of war between the drop in supply from Iran and Venezuela and the prospect of rising output from OPEC/non-OPEC coupled with rampant USA shale production", said Stephen Brennock, analyst at brokerage PVM Oil Associates.


That implies US crude output, already at a record high of 10.8 million barrels per day (bpd), will climb further.

Going into next year, "oil fundamentals are expected to weaken in 2019 on the back of stronger-than-expected non-OPEC supply, but also potential release of barrels from OPEC as the joint accord between OPEC and non-OPEC is unlikely to stay in place", JPMorgan said.

Oil prices still need more support and stability, and the pact producers "should not over exaggerate the need of the oil market for more oil supplies in the time being", the oil minister of OPEC's second-largest producer said in a statement, as carried by Reuters.

Reports started circulating that Saudi Arabia and Russian Federation have discussed lifting the oil production of the OPEC/NOPEC nations part of the deal by as much as 1 million bpd.

OPEC and its partners are due to meet on June 22-23 in Vienna.

In India, Asia's No.2 buyer, May fuel demand rose by 3.4 percent compared with the same month a year ago, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed on Monday.

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