Saudi Arabia raises oil output amid fears of supply crunch

Opec and its allies have been curbing supply since January 2017 to boost oil prices and cut bloated global inventories

The development is likely to weigh on Opec energy ministers, who are expected to discuss a plan to end the production cut deal later this month.

Meanwhile, IEA sees non-OPEC supply rising by 2 million bpd this year, lead by growth from the U.S. But infrastructure and logistics could constrain growth and the IEA only sees supply growth of 1.7 million bpd in 2019.

For 2019, IEA's estimate of demand anticipates growth of 1.4 million barrels of oil per day, amid a boost from the petrochemicals sector, where some projects are coming on stream earlier than previously thought.

An oil production shortfall in Iran and Venezuela may force OPEC and Russian Federation to decide later this month to open their taps, the International Energy Agency said Wednesday.

The Schork Report Publisher Stephen Schork on the outlook for oil prices.

Oil prices have risen about 60 percent since past year after the Organization of Petroleum Exporting Countries and other oil producers, including Russian Federation, began reducing output to cut excess supply, Reuters reported.

To make up for the losses, the IEA estimated that Middle East Opec countries could increase production in fairly short order by about 1.1 million bpd.

While Venezuela is a member of OPEC, "the disaster in Venezuela, which has created a hole in the market, is not the fault of OPEC", said Daniel Yergin, the vice chairman of research firm IHS Markit and author of several books on the energy industry. Prices have risen around 60 percent over the past year.

Oil prices eased on Thursday, dragged down by rising output, although strong demand and a drop in USA fuel inventories provided the market with some support.

After oil prices surged to $80 a barrel in mid-May, Saudi Energy Minister Khalid Al-Falih said that the Kingdom, along with other producers, would ensure the availability of adequate supplies to offset any potential shortfalls. Key producers, including Saudi Arabia and Russian Federation, have reaffirmed the deal since then.

"It's confusing why the president would come out with a statement like this now", Smith said. "The real catalyst for the recent rise in prices is the sanctions on Iran".

US production of oil came in at 10.9 million barrels per day last week, according to data released Wednesday by the US Energy Information Administration, up almost 17 percent from the year-ago level.

OPEC itself spotlighted United States output in its own monthly report on Tuesday, citing the growth of non-OPEC supply as one of several question marks hanging over the situation.

Various sources show that "considerable uncertainty as to world oil demand and non-OPEC supply prevails", OPEC said, leading to a wide range of estimates for the remainder of 2018.

Related:

Comments

Latest news

Tesla cuts 9 percent of workforce in bid to post profit
Tesla has been trying to hit a 5000 per week production target for its Model 3 sedan after facing initial production hiccups. Efraim Levy, analyst at CFRA Research says that profitability is just around the corner but it may not last long.

India Win Toss, Opt To Bat vs Afghanistan
Asghar Stanikzai , the captain of Afghanistan , mentioned that it was a proud moment for his side. There's also the question of which two to pick from Murali Vijay, KL Rahul and Shikhar Dhawan.

Springboks 'got out of jail' claims England's Eddie Jones
The loss at Ellis Park was a fourth straight in tests and fifth overall for England . England was dominant once more in the last 10 minutes and scored two late tries.

U.S. teen gets head stuck in giant exhaust pipe
Strom said the owner of the vehicle , Tom Wold, was very cool about the incident. "I bet you could fit your head inside of it". There's no word on who's going to foot the bill for the impromptu modification to the truck's exhaust pipe.

Trump nominated for Nobel Peace Prize
Trump's potential nomination makes him eligible for the 2019 Nobel Peace Prize, as the 2018 process ended last January. Asked afterward if he deserved the honor, Trump said: " Everyone thinks so, but I would never say it ".

Other news