Oil prices were mixed on Tuesday, supported by Saudi Arabia saying it would adhere to a commitment to cut output, but held back by rising U.S. production and scepticism that OPEC as a whole would comply with its commitments to reduce supplies.
The OPEC flag and the OPEC logo are seen before a news conference in Vienna, Austria, October 24, 2016.The head of the Organization of the Petroleum Exporting Countries was back in Caracas for a second meeting in two months with President Nicolas Maduro whom he lavishly praised for an “inspirational” role in the producers’ pact to cut output.
It’s been a few weeks since members of OPEC started cutting production.Saudi Arabia said last Wednesday that its production is the lowest it’s been in two years. Iraq said that it had made cuts,as did Kuwait.
Crude oil prices should remain around $50 per barrel during 2017, according to the U.S. Energy Information Administration’s Short-Term Energy Outlook released on Jan. 11.
Oil prices have ended lower on rising concerns over the extent of the OPEC (Organization of the Petroleum Exporting Countries) member countries implementing the output-cut deal.
The volatility in oil prices can be witnessed from the fact that from levels of $26 a bbl in February, crude oil prices touched the highs of $55 in December, up 15% since OPEC decision on production cut.
After being insulated from an increase in the domestic fuel prices, the ongoing upsurge in global crude oil prices could spoil the party for Indian consumers of petrol and diesel. India imports 80% of its crude oil requirements and any upward movement in oil prices casts an impact on domestic prices of petrol and diesel.
Tokyo: U.S. oil prices extended gains on Tuesday in post-Christmas trading, as OPEC and non-OPEC members are set to start curbing output in less than a week to support oil prices.
Oil cartel Opec’s decision to cut production from next month may lead to a 5-8 percent spike in retail prices of fuel over the next three-four months
India’s oil import bill will jump due to rise in crude prices following lower output call by OPEC as well as a steep fall in the rupee, but the oil subsidy burden is unlikely to cross the budget estimate of Rs 17,000-19,000 crore this year, says a report.
The trick with the Opec agreement is not to view it as a cut to output, but rather as the partial removal of excess crude oil from the global market.