Oil prices edge up as Opec confirms the market is rebalancing

Crude Oil

Daily December WTI Crude Oil

There was a growing consensus that the rebalancing process was underway in the oil market, and global oil demand growth was "very strong" at nearly 2 million b/d, Barkindo reiterated to an energy conference in India.

"The OPEC focusses on market demand and supply".

Crude oil inventories were seen down by 467,000 barrels, while distillates likely declined by 1.1917 million barrels and gasoline stocks rose 967,000 barrels.

As proof of the upgraded energy relationship with Saudi Arabia, Pradhan noted the opening of Saudi state-run oil giant Aramco's India office in Gurugram on Sunday that was jointly inaugurated by him and Aramco CEO Amin Nasser. Shipments to the USA have dropped from March through August, when they reached the lowest this year, according to the tanker data. Riyadh-based JODI collects data including production and exports directly from countries. It received its first oil cargo from the US this month. He also appreciated the 2030 vision document of the Kingdom of Saudi Arabia.

Brent crude, the benchmark for more than half of the world's oil, was little changed at $55.32 a barrel by 10:43 a.m.in London.

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Meanwhile, Saudi Aramco, which is India's largest oil supplier, is expected to establish a joint venture with Indian companies by next year.

Barkindo didn't elaborate on what those additional measures could be and if they would include the main proposal now on the table - an extension of the existing cuts by up to nine months - or something else. However, the US never joined the accord and has been able to grab market share and rapidly ramp up production since the OPEC-led cuts. The prospective restarts kept price gains in check.

The Organization of the Petroleum Exporting Countries (OPEC) is trying to reinstate its dominance in the oil industry by trying to maintain crude prices at a sustainable level. "I think that without the support of products and Brent, the market may get dragged lower in the near term as it's apparent that the market doesn't care much about OPEC already jawboning about an extension of the deal", Shelton said. Iran, still facing some US restrictions on financing, is seeking investment and technology to raise output.

In May, Saudi Arabia and Russian Federation agreed on the need to prolong the current agreement on cuts until March 2018. Improving demand may mean there's room for all in the market when the deal is over, according to Mallinson. "We are satisfied with the pace of re-balance and we want to keep the momentum going", he said.

Moreover, oil companies operating in the Gulf of Mexico are restoring the work of the platforms closed at the end of last week ahead of Hurricane Nate.

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