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5/31/2016, 7:10 PM (Source: TeleTrader)
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Oil on $50 mark on U.S. demand, ahead of OPEC meeting

Oil crossed the $50 mark once again on Tuesday, getting ever closer to the fourth month of consecutive prices increase amid lower production, expected higher demand and the upcoming meeting of the OPEC in Austria.

The premium international blend Brent rose 0.86% to $50.69 a barrel at ICE Europe as of 7:01 p.m. CET. The North American favourite West Texas Intermediate climbed up 0.67% to $49.87 a barrel, also at ICE Europe. The prices were similar at Nymex.

The OPEC daily basket price of 13 crudes stood at $44.80 a barrel on Monday, almost the same as $44.76 a barrel on Friday, according to OPEC Secretariat.

There is a decline in production of crude oil around the world, most notably in the United States of America, where the summer traveling season is at hand. This will boost the demand for fuel in the following months. That said, latest data on the state of supply in Cushing, Oklahoma – the delivery point for the U.S. light sweet crude – show a fall of nearly 687 thousand barrels. The boost in demand is counted from the latest data on consumer spending in the U.S.

Investors in the markets around the world are counting hours before the meeting of the Organization of the Petroleum Exporting Countries on June 2. The OPEC has lost some of its influence following the previous OPEC and non-OPEC summit in Doha, Qatar. Still, the biannual meeting in its headquarters in Vienna, Austria has some weight – despite now very low expectations that the cartel will reach any meaningful consensus on curbing overproduction in its ranks.

Iran refuses to accept demands to join the OPEC-sponsored output cuts, since the country has just returned to levels of production and export last seen in 2011. Asian imports from Iran jumped 13% in April compared to the same month a year ago, when international embargo was still in place.

Iraqi authorities have estimated that the country will export as much as 5 million barrels per day in June. Saudi Arabia and other OPEC members like Kuwait and the United Arab Emirates also plan to increase production. Russia said on Monday its crude production exceeded that of Saudi Arabia in March. Strikes in France, where workers have blocked the refineries and oil terminals, drying up gas stations (pictured) have not influence the European markets.

Breaking the News / ZR