Oil prices at 4-year high after OPEC rebuffs Trump

LONDON - Oil prices jumped more than 2 percent to a four-year high on Monday after Saudi Arabia and Russia ruled out any immediate increase in production despite calls by US President Donald Trump for action to raise global supply.

Benchmark Brent crude hit its highest since November 2014 at $80.94 per barrel, up $2.14 or 2.7 percent, before easing to around $80.65 by 1335 GMT. US light crude was $1.30 higher at $72.08.

"This is the oil market's response to the OPEC+ group's refusal to step up its oil production," said Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt.

OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, on Sunday effectively rebuffed a demand from Trump for moves to cool the market.

"I do not influence prices," Saudi Energy Minister Khalid al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost.

Trump said last week that OPEC "must get prices down now!", but Iranian Oil Minister Bijan Zanganeh said on Monday OPEC had not responded positively to Trump's demands.

"It is now increasingly evident, that in the face of producers reluctant to raise output, the market will be confronted with supply gaps in the next three-six months that it will need to resolve through higher oil prices," BNP Paribas oil strategist Harry Tchilinguirian told Reuters Global Oil Forum.

Commodity traders Trafigura and Mercuria said on Monday that Brent could rise to $90 per barrel by Christmas and pass $100 in early 2019, as markets tighten once US sanctions against Iran are fully implemented from November.

JPMorgan said US sanctions on Iran could lead to a loss of 1.5 million barrels per day, while Mercuria warned that as much as 2 million bpd could be knocked out of the market.

The Organization of the Petroleum Exporting Countries as well as top producer Russia has been discussing raising output to counter falling supply from Iran, although no decision has been made public yet.

A source familiar with OPEC discussions told Reuters on Friday that OPEC and other producers have been discussing the possibility of raising output by 500,000 bpd.

"We expect that those OPEC countries with available spare capacity, led by Saudi Arabia, will increase output but not completely offset the drop in Iranian barrels," said Edward Bell, commodity analyst at Emirates NBD bank.

US commercial crude oil inventories are at their lowest since early 2015 and although US oil production is near a record high of 11 million bpd, subdued US drilling points towards a slowdown in output.

(Reporting by Christopher Johnson in LONDON and Henning Gloystein in SINGAPORE; Editing by Dale Hudson and Adrian Croft)

source: news.abs-cbn.com

Saudi Arabia seeks to further reduce oil stockpiles

RIYADH - Saudi Arabia said Wednesday it would further trim oil production and exports next month to reduce excess stockpiles that have weighed on crude prices, as concerns mount over US oversupply.

Saudi Aramco's crude output in March will be 100,000 barrels per day (bpd) below its February level while exports will be kept below seven million bpd, the energy ministry said.

"Saudi Arabia remains focused on working down excess oil inventories," a ministry spokesman said.

"Market volatility is a common concern for producers and consumers, and the kingdom is committed to mitigating this volatility and moderating its negative impacts."

Saudi Arabia, the world's top oil exporter, last month called for extending cooperation between OPEC and non-OPEC producers beyond 2018, after a deal to throttle output succeeded in shoring up prices.

Oil prices fell from above $110 per barrel in 2014 to around $30 at the start of 2016. But the market has seen a turnaround since and oil prices are now close to $60.

Saudi Energy Minister Khalid al-Falih said Wednesday that producers would rather persist with production cuts this year even if that brings about a slight supply shortage.

"If we have to overbalance the market a little bit, then so be it," he told reporters following an industry conference in Riyadh.

His comment comes a day after the International Energy Agency warned that surging oil production in the United States was putting the brakes on crude prices, undermining the kingdom's efforts.

Shale producers, particularly in the United States -- who are not party to the deal -- are ramping up output to cash in on rebounding crude prices.

But Falih and his Russian counterpart, Alexander Novak, rejected the idea of any "exit strategy" from production cuts.

Following their meeting in Riyadh, the ministers of the two major oil producers said they agreed on the need to cooperate to prop up prices amid a surge in US output.

"I am confident that our high degree of cooperation and coordination will continue to bring the desired results," Falih said.

source: news.abs-cbn.com