WTI and Brent crude traded with a positive bias in the past fortnight, rising around 7.5 and 6.5 per cent, while MCX oil prices gained around 8 per cent in the same time frame. Comments from the Saudi Energy Minister about possible action to stabilise prices triggered a round of buying and the International Energy Agency forecast crude markets to tighten in the second half of 2016. Saudi Energy Minister Khalid al-Falihsaid Opec members and non-members would discuss the market situation, including any action that may be required to stabilise prices, during an informal meeting on September 26-28 in Algeria.
Oil rallied with few stops over the past two weeks, going from a bear to bull market, as it reversed a loss of more than 20 per cent in early August on speculation that Saudi Arabia and the rest of the Opec nations will agree to a production freeze with Russia and other non-Opec members. However, Iran, the third-largest producer in the Opec, had earlier this year refused to join such an attempt by the group and non-Opec members led by Russia to stabilise production.
Tehran has been boosting oil output since the lifting of the western sanctions in January. News of its potential support for a production freeze helped halt an abrupt slump in crude prices. Iraq’s Prime Minister said the country had not yet reached its full oil market share, suggesting his government would not restrain crude output as part of any possible Opec agreement to lift prices. Despite rebounding this year, oil still trades at less than half of mid-2014 levels, with the market still worried about a glut that spurred the biggest price rout in a generation. The selloff has battered the economies of Venezuela, Iraq and Nigeria, which are more anxious to boost crude prices than major Opec producers.
On the other side of the globe, China’s July diesel and gasoline exports soared 181.8 per cent and 145.2 per cent, respectively, from the levels reported for the same month last year, putting pressure on refined product margins. Iraq planned to increase exports of Kirkuk crude by 150,000 bpd from its northern fields while Nigerian rebels who regularly attacked oil facilities in the country earlier this year said they were ready for a ceasefire. US drillers added 10 oil rigs in the week to August 19, the eighth straight week of rig additions, as crude rebounded toward the $50 a barrel mark that makes drilling viable. Johnny Oduya Authentic JerseyShare This