Oil prices climb on tightening United States market

The cabinet stressed that one of the most important objectives of the kingdom's petroleum policy is to always seek to achieve balance and stability in oil markets, as well as to coordinate and consult with other producing countries and major consuming countries.

Geoffrey Craig, the oil futures editor at Platts, said the drain on USA inventory levels is in part because of higher domestic exports, which set a record for the week ending June 22 at 3 million barrels per day.

"He has agreed", Trump tweeted on June 30.

Brent oil rose on Wednesday, driven higher by a threat from an Iranian commander and a drop in US crude inventories for the second week in a row.

On May 8, President Donald Trump officially withdrew the USA from the UN-endorsed nuclear agreement and threatened Iran with worst sanctions.

Saudi Arabia doesn't seem to be in a rush to fulfill Trump's request for an extra 2 million barrels per day. "We are working to minimize disruptions to the global market but we are confident there is sufficient global spare oil capacity".

Some are saying that the United States' recent declaration of zero tolerance for Iranian exports has caused bullish investors to reassess the impact of US sanctions on Iran's exports, believing that shipments may fall by 1.1 million bpd by year end. Tehran, however, vowed on Sunday to foil any U.S. bid to block its oil exports.

Still, Iran vowed on Sunday to defeat U.S. efforts to block its oil exports and warned rival producer Saudi Arabia it would never take Tehran's "place" on the global oil market.


"There are indications that Iranian oil exports have already begun dropping during the first half of June, mostly to Europe".

The firm acknowledges that Saudi Arabia is now raising production and expects Russian Federation, the United Arab Emirates and Kuwait to pump more oil, but says it will not be enough to balance the market.

"We also expect Venezuelan production to decline a further 150,000 bbl/d towards year-end, with risks still skewed to the downside", Bjørnar Tonhaugen, vice president of oil market research at Rystad Energy, said.

Some argue that Saudi Arabia, Russia and the UAE, along with surging US exports will cover the shortage.

Inventories at Cushing fell 2 million barrels last week, according to a separate forecast compiled by Bloomberg.

This was due to outages around the world from Libya to Canada and Venezuela are keeping priced elevated.

Hook declined to say if the kingdom can offer that additional supply, but the USA is "working to minimize disruptions to the global market", Hook said.

"Also, taking a broad range of estimates from IEA, EIA and others, Saudi held spare capacity in the range of 1.3 - 2.1 mb/d when oil production was ~10 mb/d".


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