Oil Futures Bullish On Continued Production Cuts

Oil Futures Bullish On Continued Production Cuts

While Kuwait supported the announcement, other Organization of the Petroleum Exporting Countries (OPEC) members and key oil producers are set to meet on 25 May in Vienna to decide the future course.

"The market will also be looking at export cuts and not just production cuts, which is what is required to rebalance the market".

"When the two biggest oil producers of the world reach a consensus on the extension of a supply cut the market will listen", said Tamas Varga of oil broker PVM in a report, of the rise in prices on Monday.

Venezuela is undergoing a wave of unrest with protesters angry at an economy in crisis, with food and medicine shortages and soaring inflation.

USA shale drillers aren't the only ones threatening to offset OPEC's oil production cuts. Oil has surrendered about half its gains since the producers' accord to cut output late past year. This is partially because new production has come on line and partially due to subdued demand as the world continues to recover from the economic pneumonia of the Global Financial Crisis which has left the global economic recovery in a relatively feeble state.

Global benchmark Brent increased by as much as 3.3 per cent to US$52.52 a barrel on ICE Futures Europe and West Texas Intermediate climbed by up to 3.4 per cent, to $49.45 a barrel on the New York Mercantile Exchange.

Two top Trump advisers dodge Kushner questions
But McMaster cast the backchannel communications as entirely normal, and said that it was not anything to be concerned about. Mr Trump's first national security adviser Michael Flynn was said to be present at the meeting.

Russian Federation and Saudi Arabia will now hold consultations with other producers "with the aim of achieving complete consensus" on the extended production cuts before the scheduled OPEC meeting May 25 in Vienna. A recent increase in Libyan output, together with a surge in North American production and signs of recovery in Nigeria, may undercut OPEC's strategy to re-balance the market and prop up prices.

Saudi oil minister Khalid al-Falih said Monday the deal extension would have the same volume allocations that were included in the December agreement.

Goldman said that beyond the ongoing rise in U.S. oil production, which is up over 10 per cent since mid-2016 to 9.3 million bpd, output will increase by Opec members who were exempt from the cuts, or where supply disruptions had ended, including Libya and Nigeria.

"We never say that our goal is a price".

However, higher output by the United States, which did not participate in the deal to cut supplies, has undermined the efforts of Opec and Russian Federation.

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