Oil hits six-week high on hopes of extended OPEC cuts

Oil hits six-week high on hopes of extended OPEC cuts

"In particular, tension between the United States and Iran/Venezuela continues to impact the market".

With OPEC and its allies set to meet on Thursday to consider fresh reductions, the monthly report argued that the oil market needs stability.

The Opec+ alliance has committed to curb production by 1.2 million barrels per day through March 2020, with Saudi Arabia accounting for the largest cut within the 800,000 Bpd Opec target.

OPEC expects non-OPEC production to rise by almost 2 mbd this year and 2.25 mbd next year, largely due to gains in the United States.

"Our oil supply-demand outlook for 2020 calls for additional OPEC production cuts to keep inventories near normal", Goldman analysts wrote in a note dated September 9. Saudi Arabia wants higher prices, but realizes the U.S.

Saudi Arabia has shouldered the bulk of OPEC+ production cuts, and is pumping about 500,000 barrels a day less than its agreed cap. - Saudi King Salman on yesterday promoted one of his sons to the pivotal role of energy minister, strengthening his family's grip on the levers of power from oil to finance and defence.

The prince was in Abu Dhabi to attend the World Energy Congress, followed by a meeting on Thursday of the Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ alliance for a supply cut deal reached previous year.

Brent LCOc1 was up 26 cents, or 0.4 per cent, at 62.85 dollars a barrel by 0349 GMT, while USA crude CLc1 was 27 cents, or 0.5 per cent, higher at 58.12 dollars a barrel.

"There is nothing radical in Saudi Arabia, we all work for the government, one person comes, one person goes", he said while attending an energy conference in Abu Dhabi. "What they look like at the end is going to be a subject of negotiation, but as we move forward with U.S. technology in particular, we are very much committed to finding an appropriate 123 with Saudi Arabia".

Until Prince Abdulaziz's appointment late on Saturday night, Saudi Arabia's oil ministry has been since 1960 headed by civilian technocrats. Riyadh will continue to back the OPEC+ coalition that combines Russian Federation and other producers with members the Organization of Petroleum Exporting Countries.

However, while oil markets have reacted positively to the potential of an extension of current OPEC cuts, the challenges for the oil market remains on the demand side amid the slowdown in the global economy stemming from US-China trade wars.

The prince's unparalleled diplomatic network may help soothe relationships frayed by Al-Falih, who often seemed impatient with OPEC members unable or unwilling to contribute meaningful oil production cuts.

The top 10 non-OPEC producers saw output growth accelerate to nearly 8% year-on-year by December with USA shale firms raising output at a rate of nearly 20%.

The 34-year-old crown prince has struggled to attract foreign investors, however, which analysts say is key to diversifying the economy and creating millions of jobs for young Saudis entering the workforce.



Other news