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Oil markets settle lower, but prospects are in place for prices to continue climbing

Wednesday, November 8th 2017 - 10:50 UTC
Full article 2 comments
Saudi Crown Prince Mohammed bin Salman moved to shore up his power base with the arrest of royals, ministers and investors Saudi Crown Prince Mohammed bin Salman moved to shore up his power base with the arrest of royals, ministers and investors

Oil settled lower on Tuesday after rising to the highest since July 2015 the previous day, while tension flared between Saudi Arabia and Iran, and the Saudi crown prince tightened his grip on power.

 Brent crude futures LCOc1 settled down 58 cents, or 0.9%, at US$ 63.69 a barrel, having climbed 3.5% on Monday. U.S. West Texas Intermediate (WTI) crude CLc1 fell 15 cents, or 0.3 percent, to US$57.20 a barrel.

Saudi Crown Prince Mohammed bin Salman moved to shore up his power base with the arrest of royals, ministers and investors, which an official described as part of “phase one” of a crackdown.

More tellingly, tensions escalated between OPEC members Saudi Arabia and Iran, which analysts said did more to rattle the market than the prince’s purge.

“Saudi Arabia is really going all-in again against Iran and that is, for me, more the focus than the domestic issue,” Petromatrix strategist Olivier Jakob said.

“On the one hand, it increases the global geopolitical risk level, but it also increases the difficulty of keeping consensus within OPEC.”

The Organization of the Petroleum Exporting Countries, led by Saudi Arabia, has agreed to restrain crude output by 1.8 million barrels per day (bpd) together with 10 other nations including Russia until March 2018. OPEC meets at the end of this month and has been widely expected to extend the deal.

The producers are in the process of inviting other countries to the Nov. 30 meeting, OPEC’s Mohammad Barkindo told reporters on Tuesday, with a view to joining the deal. He declined to name the countries concerned.

Brazil has rejected an informal effort by Saudi Arabia to coax Latin America’s top oil producer into joining OPEC-led production cuts aimed at boosting prices that have been hit by oversupply, a Brazilian official said.

The Saudi-led coalition fighting against the Houthi movement in Yemen said on Monday that it was closing all Yemeni air, sea and land crossings after a missile was fired towards Riyadh at the weekend.

Saudi Arabia and its Gulf allies have said they see Iran as responsible for the Yemen conflict and on Monday Saudi Foreign Minister Adel al-Jubeir said his country reserves the right to respond to Iran’s “hostile actions”.

The U.S. Energy Information Administration forecast domestic crude oil production in 2018 to rise by more than previously expected.

In its monthly short-term energy outlook, the agency forecast that U.S. crude oil output will rise by 720,000 barrels per day (bpd) to 9.95 million bpd in 2018. Last month, it expected a 680,000 bpd year-over-year increase to 9.92 million bpd.

Top Comments

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  • :o))

    THAT's just a Fairy-Tale - “prospects are in place for prices to continue climbing”: Yes indeed!

    But NOT of the Crude Oil! There is PLENTY, for EVERYBODY!

    Nov 09th, 2017 - 01:04 am 0
  • Brit Bob

    Falklands Oil - Worth a Punt?

    By a ruling of the UN, Argentina will extend its maritime platform (Politica Argentina) ; New map of the maritime platform reaffirms the sovereignty of Malvinas with UN endorsement (ElCronista); Argentina enlarges its territory 35%, with a UN endorsement ...(La Capital).To add to this euphoric atmosphere the Argentine Foreign Minister stated, ''This is a historic opportunity for Argentina. We have taken a great step in the demarcation of the outer limit of our continental shelf; the most extensive boundary of Argentina and our border with humanity,'' Foreign Minister Susana Malcorra told La Nacion, which tomorrow will publicly announce the details of this resolution. (Susana Malcorra, quoted by Dinatale M, La Nacion, Argentina, 27 March 2016).

    But what is the truth...
    Argentina's Continental Shelf Claims and The UN CLCA Commission (1 page):-

    Nov 08th, 2017 - 11:31 am -1
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