Published: Sun, June 10, 2018
Markets | By Erika Turner

Oil prices rise on ongoing Venezuelan supply trouble

Oil prices rise on ongoing Venezuelan supply trouble

"OPEC supply changes remain the biggest uncertainties in the market", said Xi Jianrui, senior crude analyst with oil consultancy JLC said.

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".

Benchmark Brent oil futures dropped as much as 2 percent to $73.81 a barrel in London trading after the USA request was reported, according to Bloomberg, but later recovered to $75.34. The top three producers a year ago were Russian Federation with daily production of 10.35 million barrels, Saudi Arabia with 9.96 million barrels and the United States with 9.36 million barrels.

"Oil prices in the United States are at an eight-week low, hovering around $64.5 a barrel on Tuesday for West Texas Intermediate, as USA production continued its climb toward 11 million barrels a day".

Brent crude oil futures were up 5 cents, to $75.34/Bbl by 2:23 p.m. ET, climbing back from a session low of $73.81/Bbl. "The countries will not risk a landslide in prices after suffering from the oil crash of 2014", Benjamin Lu of Singapore-based brokerage Phillip Futures said on Friday in a note. The contract added 77 cents to US$65.52 yesterday.

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While Saudi Arabia and Russian Federation have signaled they're ready to raise production, Iraqi Oil Minister Jabbar al-Luaibi told Reuters an output boost isn't on the table when the group gathers in Vienna on June 22.

This followed an unofficial request from the United States asking OPEC's effective leader Saudi Arabia to boost output. Its output has been hampered by inadequate investment, mismanagement and USA sanctions.

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

Oil prices edged lower Friday, giving up some ground as investors continued to bet on increased supply despite concerns over output from Venezuela and Iran.

Algerian Energy Minister Mustapha Guitouni said on state radio: "What matters to us is that there is a balance between supply and demand to ensure the stability of the oil markets".

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