Oil Prices and OPEC

Oil Prices and OPEC

The two countries, which together accounted for 17 per cent of world oil consumption past year, are working on a block that would challenge Opec's ability to manipulate crude prices in a way that plays havoc with economies of oil importing countries.

In April, Trump also blasted OPEC on Twitter, accusing the group of "artificially" raising oil prices.

With oil producers" cartel OPEC playing havoc with prices, India discussed with China the possibility of forming an "oil buyers club' that can negotiate better terms with sellers as well as getting more USA crude oil to Asia to cut dominance of the oil block. In addition to this, the new arrival of fracking firms in the USA led to pumping huge quantities of oil and gas, thus impelling more price fall.

Earlier in the session, Brent and US crude had fallen on concerns about rising production in the USA and expectations OPEC and other producers could relax voluntary output cuts.

After maintaining a steady decline in 2015-16, oil prices have begun to rise since the middle of the a year ago and the increase has picked up pace in the last couple of months. "Not good!" U.S. president Donald Trump tweeted. OPEC's actions, whether to cut or increase production, often heavily influence the price of oil, and by extension the prices consumers and businesses pay for fuel.

"Our best guess is now that there will be no formal decision to change the production target, but a rather a type of agreement or understanding that compliance will be relaxed", said Johannes Benigni, chairman of JBC Energy Group in Singapore.

By 2023, oil demand will hit 104.7 million barrels per day, up 6.9 million bpd in 2017, according to the International Energy Agency.

Oil price report released yesterday by OPEC showed that Brent crude was down 20 cents at $75.68 a barrel, as USA light crude was 35 cents lower at $66.01.

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At Thursday's soccer match, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, along with Al-Falih and his Russian counterpart Alexander Novak, were to discuss how to boost oil production while maintaining their petro-alliance and overcoming opposition.

US crude production has surged over the past eight years thanks to a shale boom, driven primarily by gains in the prolific Permian basin, which stretches across West Texas and eastern New Mexico.

"Markets are braced for the most fractious conference as OPEC members look fundamentally divided", said Phillip Futures analyst Benjamin Lu.

Predictions for the scale of increase ranged from about 180,000 barrels a day to as much as 1 million barrels.

Official US production and inventory data is due to be published on Wednesday by the Energy Information Administration (EIA).

In the United States, gasoline pump prices nationwide have risen to near $3 a gallon during the peak summer travel season, still less than the $4 a gallon during the 2007-2009 Great Recession.

Rolling back most but not all of their output cuts within three months.

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