Tuesday , October 26 2021

Oil: agreement to reduce inventories and raise prices



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Oil prices in May suffered their worst month-on-month decline for six months, amid concerns that trade disputes will hit demand for crude.

Saudi Arabia produced 9.65 million barrels of oil per day in May, according to a source in the country's oil industry, a cut above the Organization of Petroleum Exporting Countries (OPEC) target and its allies, such as Russia. a group known as OPEC +.

The production target for the largest oil exporter, Saudi Arabia, under the OPEC + agreement is 10.3 million barrels per day. In April, the country produced 9,742 million barrels per day, according to OPEC data. This agreement is valid until the end of June.

"We will do what we need to maintain market stability after June. For me, this means reducing stocks from their current high levels," Falich told the Arab News.

They want a reduction in inventories

US oil reserves fell less than expected last week, according to data released by the US Energy Information Agency on Thursday. Shares are close to the highest levels since July 2017 and about 5% above the five-year average.

The price of oil recovered after the guarantees from Saudi Arabia. At 14:50 GMT, Brent crude futures rose 0.66 percent to $ 62.40, while US crude oil rose 1.25 percent to $ 54.17 a barrel.

By creating a negative market climate, the US and China, the world's two largest economies, are in a trade dispute that fears a global economic decline, which in turn may affect demand for oil.

"Increasing trade intensities and potential barriers will certainly have a negative impact on the global economy and growing demand for oil. But the direction of the negotiations (between the US and China) is difficult to predict," Falich said.

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