Published: Sun, October 07, 2018
Economy | By

Oil prices rise, supported by U.S

Oil prices rise, supported by U.S

Saudi Arabia is now pumping about 10.7 million barrels per day (bpd.) and can add a further 1.3 million "if the market needs that", he said.

Still, uncertainty still exists on whether other oil producing countries could fill the gap of crude oil supply to be left by Iranian sanctions. This situation essentially leaves Saudi Arabia, the world's only swing producer, powerless to prevent a supply shock and subsequent price spike to $100 in the final quarter of this year.

But the pull-back did little to dent two months of rises that have added 15-20 percent to oil prices since the middle of August as impending USA sanctions on Tehran restrict Iranian crude oil exports.

West Texas Intermediate for November delivery fell $2.08 to settle at $74.33 a barrel on the New York Mercantile Exchange.

Crude oil futures fell Rs 8 to Rs 5,648 per barrel on Thursday due to profit-booking by investors even as Brent continued to quote above $86 a barrel overseas.

However, Iran's OPEC Governor Hossein Kazempour Ardabili says the U.S. president has apparently been duped by Saudi Arabia. "Well, probably to some extent he's right, but we are absolutely OK with it at $65 to $75 per barrel to ensure the efficient operation of oil companies and ensure investment", Putin told delegates at the Russia Energy Week forum in Moscow.

Russian President, Vladimir Putin, has said President Donald Trump needs to look in the mirror to find the person responsible for higher oil prices.

He added, "But let's be frank, such oil prices are to some extent the result of the U.S. administration".

"The scale of the demand slowdown is likely to be far less than the USA output slowdown and the loss of Iranian oil". Oil peaked at $147.27 on July 11, 2008.

"Notwithstanding all the pressures that the Americans are creating on the oil issue, Iran has its own oil customers, and the work is going on in a way that no problems will arise", he said. However, the market has gone from strength to strength due to the expected severity of the Iran sanctions and output woes elsewhere, notably in Venezuela. Saudi Energy Minister Khalid Al-Falih revealed the reason his country can't increase production more is that "all of our customers are receiving all of the barrels they want".

Despite the claims, concerns over OPEC's untested oil supply cushion has been fueling bullish market sentiment.

The impact of lopsided positioning on the evolution of prices has been explored by researchers including the physicist Didier Sornette ("Why stock markets crash: critical events in complex financial systems", 2017).

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