Oil prices fall as US crude production hits another record

Oil prices fall as US crude production hits another record

Oil prices fall as US crude production hits another record

Saudi Arabia's oil minister said it's "inevitable" that OPEC and its allies will agree to boost oil output gradually, giving the most definitive signal yet that the cartel will alleviate high prices for consumers. Russia's production was 11.1 million barrels a day in June, exceeding its quota, according to sources familiar with the matter.

Oil prices have risen around 60 percent over the previous year after the Organization of the Petroleum Exporting Countries and some non-OPEC producers, including Russian Federation, started reducing supplies in 2017.

All the nations would proportionally share out a 1.8 MMbpd increase to their output limit starting as soon as July, the person said, asking not to be identified because the information isn't public.

"The prospect of easing supply curbs from OPEC-led producers continues to be reflected in oil's overall depressed price action", said Lukman Otunuga, analyst at futures brokerage FXTM. Seasonal direct crude burn for power generation picked up as the weather turned warmer and air conditioning use increased, while exports also rose, survey participants said. President Vladimir Putin will host Saudi Crown Prince Mohammed Bin Salman, while energy ministers Alexander Novak and Khalid Al-Falih will also meet.

Trump tweeted on Wednesday: "Oil prices are too high, OPEC is at it again". Most analysts expect production there to go even lower. Instead of getting a discount for bulk purchases, producers such as Saudi Arabia, charge a so-called "Asian Premium" for shipments to Asian buyers, including India and Japan, as opposed to Europe.

ONGC Videsh has set the condition of Venezuela clearing past dues of $449 million before it commits to further investment in the San Cristobal field in the Latin American nation. In April, the group's total reduction added up to nearly 2.5 MMbpd, according to the International Energy Agency.

According to the ministry, Pradhan is scheduled to visit Vienna on June 20-21 to participate in the OPEC global seminar and will discuss these key issues with OPEC Secretary General Sanusi Barkindo and ministers from the 13-nation cartel.

OPEC itself spotlighted U.S. output in its own monthly report on Tuesday, citing the growth of non-OPEC supply as one of several question marks hanging over the situation. ING sees a possible expansion in the group's supply of between 800,000 and 1 MMbpd this year. Of those who predicted the size of the increase, the majority forecast about 500,000 barrels a day.

Martijn Rats, Morgan Stanley's global oil strategist, said oil prices would be supported "if supply and demand is in balance, if inventories have drawn significantly and spare capacity isn't all that great".

This is the first month since October that Saudi crude production has surpassed 10 million b/d, according to survey data.

There is also the specter of competition from USA shale oil producers and a reluctance to cede more market share to them.

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