Published: Пн, Апреля 15, 2019
Business | By Eloise Houston

OPEC Could Raise Oil Output if Prices Increase, Shortages Mount

OPEC Could Raise Oil Output if Prices Increase, Shortages Mount

U.S. West Texas Intermediate crude at Midland yesterday traded at the biggest discount to futures in nearly four months after Phillips 66 closed a unit for maintenance at its Borger, Texas refinery, adding to a backlog of barrels as production climbs.

That is down 9.4 percent from 10.23 million bpd in February as state-owned refiners began maintenance. If this happened, any increase would be smaller than 1.2 million bpd, the source said.

Oil prices have recovered sharply since December, when they fell to a 15-month low, and ICE Brent has been trading a five-month high of above $71 per barrel this week.

"We maintain our forecast of 1.4 Mmbpd (in 2019 oil demand growth), but accept that there are mixed signals about the health of the global economy, and differing views about the likely level of oil prices", IEA said. Macroeconomic uncertainties can take their toll on oil demand, the IEA said.

On a less-brighter note, the World Trade Organization recently slashed its estimates for 2019 economic growth by a staggering 1.1 percent.

It said that US, Brazil, Russia, UK, Australia, Ghana, Sudan and South Sudan will be the main drivers of supply growth this year.

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"Russia has started talks about an oil production rise as it can hardly follow the OPEC+ deal", said another Russian energy source.

Oil markets are tightening amid the increasing effectiveness of USA sanctions on Iran and Venezuela, the International Energy Agency said yesterday.

The kingdom also self-reported production of 9.79 million bpd, its lowest since January 2017 and a fall of 350,000 bpd month on month.

In December, OPEC and other major oil producers, including Russian Federation, pledged to cut production by 1.2 million barrels per day in order to prop up prices, effective from this January. WTI whit a high of $64.79 going back to November 1 earlier this week.

Adding to the impact of the involuntary declines, top exporter Saudi Arabia has cut production by more than it agreed under the global pact. "Iranian production was stable at 2.7 million barrels per day, (but) could take a further hit if the USA cuts import waivers in May", said Jefferies bank on Friday.

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