Russia, Kazakhstan To Increase Oil Output Following OPEC+ Meeting

Storage tanks located near a dock for Hornbeck Offshore Services Inc. oil industry support vessels in Port Fourchon Louisiana U.S. on Thursday

Storage tanks located near a dock for Hornbeck Offshore Services Inc. oil industry support vessels in Port Fourchon Louisiana U.S. on Thursday

The upturn in oil prices was supported by Saudi Arabia's pledge to cut output and a global stocks rally as investors looked beyond rising coronavirus cases, according to Reuters.

U.S. crude oil inventories decreased by 8.0 million barrels during the week ending January 1, the U.S. Energy Information Administration (EIA) said in a report on Wednesday.

Data released by Baker Hughes today said the oil drilling rigs count in the US rose for a seventh straight week, surging up by 8 to 275 this week.

The kingdom, the de facto leader of the Organization of the Petroleum Exporting Countries (Opec), was at odds with some other producers that wanted to boost output to head off USA shale companies from capturing more market share.

Meanwhile, annual commodity index rebalancing may provide another tailwind, with as much as $9 billion of oil contracts possibly being bought over the five days of activity that start Friday, Citigroup said.

Retail prices of fuel in India are revised daily by oil marketing companies based on worldwide crude oil rates and rupee's exchange value. At the same time, the API has indicated a drop in United States oil inventories.

"We do that willingly and we do that with the goal of supporting our economy, the economies of our colleagues", said Saudi Minister of Energy Prince Abdulaziz Bin Salman during a press conference, according to CNN.

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Alexander Novak, Russia's deputy prime minister who also doubles as the country's energy minister called Saudi Arabia's surprise a "great New Year present" for the oil industry.

The increases in production allowed to Russian Federation and Kazakhstan were also far below what they had demanded.

Futures in NY rose as much as 5.1 per cent, topping US$50 a barrel for the first time since February before easing off the high.

"At the same time, it reiterated the critical importance of adhering to full conformity, and compensating the overproduced volumes in accordance with the statements of the 11th and 12th ONOMM, in order to achieve the objective of market rebalancing and avoid undue delay in the process, " it said.

Saudi is going beyond its promised cuts as part of the OPEC+ group of producers to support both its own economy and the oil market, Energy Minister Prince Abdulaziz bin Salman said on Tuesday.

The decision Tuesday saw energy prices jump.

At the Opec+ meeting in early December, participants led by Saudi Arabia and Russian Federation agreed that aggregate output cuts of 7.7 million bpd between August and December 2020 would be tapered to 7.2 million this month. Their goal is to eventually increase production by 2 million barrels a day.

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