Oil price hikes and their impact on Zim's economy

Crude Spills on Saudi's Proposed Increase Short Term Top Likely

Crude Spills on Saudi's Proposed Increase Short Term Top Likely

The 713,000 barrel-a-day decline in Opec's total supply between 2016 and last month can be accounted for nearly entirely by the decline in Venezuelan output, which has fallen by about onethird - 718,000 barrels a day - over the period.

The domestic oil industry in the United States has emerged in recent years a powerful swing force in the global petroleum economy.

India is, says the US Energy Information Administration, the third largest consumer of crude oil in the world at 4.14 million barrels a day (mbd), about four per cent of global consumption.

Data from industry group American Petroleum Institute (API) showed that US crude inventories rose unexpectedly last week, increasing by 1 million barrels against analyst expectations of a 525,000-barrel decline. Some even speculated that oil prices would jump to and probably beyond $100 levels next year.

Oil prices surged to their highest level in over three years last week, and strategists were marveling that prices had shot up so quickly.

The record outbound volumes come as USA crude production hit all-time highs, depressing US prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets.

However, if USA crude exports to Asia do surge to more than 1 million bpd in coming months, this could provide the Saudis and the Russians with an added incentive to make more oil available to the market, and at a more competitive price.

For many, this will be enough to pull out of the sector if there is a threat of lower oil prices on the horizon.

LeBron James Reveals How He Feels Heading Into Game 6 vs. Celtics
Just a few minutes into the game, Kevin Love and Jayson Tatum accidentally clashed heads as Tatum tried to navigate a Love screen. The Cavs held a double-digit lead throughout the third quarter before Boston got within a touchdown in the fourth quarter.

Oil headed for its longest run of losses since February as investors weighed Saudi Arabia and Russia's proposal to boost output to ease concerns over supply shortages.

"It was always going to be a tricky announcement of when to ease production cuts", said Ole Sloth Hansen, head of commodities research at Saxo Bank A/S in Copenhagen.

"Clearly, the commentary from Russian Federation and Saudi Arabia popped the bubble", said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. It will be made in June, when OPEC+ meets to discuss the matter further.

"There's some discord among the Gulf countries as to whether or not they should increase now or not", Kilduff said.

Anticipation of an increase in supply by OPEC and non-OPEC members is likely to have a moderating effect on oil prices in the coming weeks.

The U.S. crude production looks to show no stop on producing despite the influx of negative news and prices from each succeeding session.

The global sulfur limit on fuel oil will be set at 0.5% m/m (mass/mass) in 2020 down from the 3.5% m/m current global limits.

Here's the problem: "Middle Eastern crude oil producers could be one the biggest losers from the new regulation, because they pump high-sulfur crude, Amrita Sen, chief oil analyst at Energy Aspects", told CNBC.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.