United States urges OPEC to raise oil production by 1million

Mae Love
June 10, 2018

Crude oil prices plunged by 7 per cent in 2 sessions as Saudi Arabia and Russian Federation confirmed that they would release 1 million barrels a day in the wet barrel markets.

Earlier Tuesday, Bloomberg reported the USA government had asked the producers to increase oil production by roughly 1 million barrels per day (MMBPD).

Crude oil prices fell yesterday with the global benchmark, Brent crude heading towards its lowest finish in about one month after a report revealed a surprise weekly climb in the United States' domestic crude inventories.

The huge increase in production in the U.S.is capping prices and increasing demand for US crude oil outside the United States.

Brent crude futures added 25 cents, or 0.33 percent, to $75.53 a barrel by 0717 GMT, after settling down 2 percent at $75.29 on Monday.

Analysts insist oil prices are heading higher. "With this more than 10 percent (price) fall, they may reconsider things as we come closer to the meeting".

OPEC will meet in Vienna on June 22 to decide whether the group and non-OPEC producers, including Russian Federation, should raise output to make up for any supply shortfall from Iran and Venezuela.

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OPEC will meet on June 22 and needs a consensus of all members to officially change its output policy. Experts were expecting a 1.8 million draw.

According to the news agency's sources, the White House official called Saudi Crown Prince Mohammed bin Salman to make sure that the U.S. could count on Saudi Arabia's support, both as the world's biggest oil exporter and an influential member of OPEC.

Oil prices fell on Friday, extending losses as JP Morgan cut its crude price forecast, after already weakening on concerns about surging USA output weighed and falling demand in China. Trump has complained, meanwhile, that OPEC was inflating the price of oil through artificial means.

The US has quietly pressed Saudi Arabia, the group's biggest member, and other producers to raise supply by about 1 million barrels a day, people familiar with the request said this month.

Despite this, oil markets are not unanimously bullish.

Also said to have affected Wednesday's market activity was Dharmendra Pradhan, oil minister for India, who told media that "For the first time, the Saudi oil minister called us and said "we are revisiting our policy on oil output cuts".

Trump announced last month that the US would back out of a deal with Iran that sought to curb the country's nuclear ambitions in exchange for sanctions relief. For the week, US crude was set to fall 0.2 percent, while Brent was set to fall 0.6 percent.

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