Oil falls on escalating US-China trade dispute, rising output

Oil falls on escalating US-China trade dispute, rising output

Oil falls on escalating US-China trade dispute, rising output

"While concerns over OPEC production and demand may continue to weigh on prices in the near term, this leads us to reiterate our forecast for Brent prices to rally further, with risks to our peak $82.50/b forecast still skewed to the upside later this year", they added. The amount of increased oil output that is being discussed in the framework of the OPEC + agreement is fully correlated with the decline made by Venezuela in the last 1.5 years.

China imposed import duties on USA products on Friday, and suggested that crude oil tariffs were planned.

Behind the scenes, the Donald Trump administration, anxious about the impact of rising gas prices on mid-term voters, is lobbying hard for a surge in production.

"Looking ahead, I remain optimistic that we will fulfil our goal of delivering sustainable oil market stability, which is meant to serve the long term interests of producers, consumers and the global economy", Al Mazrouei said in a statement issued by the ministry ahead of 174th Meeting of the OPEC Conference next week in Vienna, Austria.

Oil prices fell on Tuesday as an escalating trade dispute between the United States and China triggered sharp sell-offs in many global markets. Those who hate me call me crude."I worry for my future; everyone now talks down on me". In accordance with Saudi Arabia, Russians whose economy has been under pressure by the USA sanctions also seem to be intrigued by the idea of taking some of the market share that the supply losses from Venezuela and Iran is going to present. A dip in oil prices over this last week suggest that the market is factoring in a likely rise in production levels.

"There is an element of self-preservation in seeking to do this, as while most oil producers prefer higher prices they will also want to avoid a scenario where prices reach a level where demand drops off sharply, thus triggering a global slowdown, as well as accelerating the push for renewable (energy)", he said.

The next meeting of the parties to the deal will be held on June 23 in Vienna, while the meeting of the OPEC members will take place one day earlier. But Iran, Venezuela and Iraq will likely oppose the duo's proposal to increase output.

The producer cartel of the Organization of the Petroleum Exporting Countries (OPEC), which is de-facto led by Saudi Arabia, and some allies including Russian Federation have been withholding output with since the start of 2017.

The increase of 300,000 to 600,000 barrels a day - above the current OPEC+ production of about 32 million barrels a day - is a less theoretical number. The index looks to track the performance of the energy sector of the US equity market.

If implemented, China may react to US tariffs by putting a 25 percent duty on USA crude oil imports, which have been surging since 2017, to a business now worth nearly $1 billion per month. Over the past six months, the United States' crude export to China was an average 363,000 bpd.

SEB analyst Bjarne Schieldrop said Russia's stance in favour of easing production curbs should also be seen against the backdrop of Moscow's efforts to increase its geopolitical clout in the Middle East.

Related news