Crude Price Falls On Saudi Arabia Production Increase, CAD Follows

Crude Price Falls On Saudi Arabia Production Increase, CAD Follows

Overall, however, analysts said OPEC's production policy as well as unplanned supply disruptions were now the main price drivers. It's awful what they do to us, he said.

Iran announced on Sunday that it would permit private companies to export crude oil as Tehran attempts to thwart U.S. sanctions against the country's oil industry.

Oil has been buffeted lately as U.S. President Donald Trump - facing high retail gasoline prices ahead of midterm elections - pushes Saudi Arabia to boost output.

Saudi Arabia has expressed readiness to use spare production capacity to maintain market balance. "Prices to high! He has agreed!"

The Trump administration is pushing countries to cut all imports of Iranian oil from November when the United States re-imposes sanctions against Tehran, after Trump withdrew from the 2015 nuclear deal agreed between Iran and six major powers, against the advice of allies in Europe and elsewhere.

Libya's National Oil Corporation declared "force majeure", or unforeseeable circumstances, as the country's continued struggles with internal conflicts see approximately 850,000 barrels per day after losing control of Zueitina and Hariga ports this week.

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After reducing production by more than 1.8 million barrels daily since January a year ago to drain a global glut, the producers decided in Vienna on June 23 to reverse course.

Apart from Iran, Venezuela, Libya and Angola are also facing chronic production issues. Inventories at Cushing, Oklahoma, fell 2 million barrels last week, according to a separate forecast compiled by Bloomberg. Analyst expectations were for a draw of 1 million barrels. The facility produced 253,000 bpd on average previous year.

The agreement from Saudi Arabia is surprising as in recent months they have agreed with Russian Federation and other OPEC+ members to keep production relatively low.

The impact on the tanker trade remains unclear as oil buyers could turn to regular sources such as Saudi Arabia for more barrels, or look further afield at long distance sources such as the US.

"Also, taking a broad range of estimates from IEA, EIA and others, Saudi held spare capacity in the range of 1.3 - 2.1 mb/d when oil production was ~10 mb/d".

Asked whether someone was manipulating oil markets, Trump said: "100 percent".

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