Oil Edges Up Despite Trump's OPEC Pressure

Tuesday, February 26, 2019

U.S. crude inventories seen up for sixth week; prices helped by OPEC cuts, U.S. sanctions.

Brent oil edged up to $65 a barrel on Tuesday as Saudi Arabia and the rest of OPEC were expected to stick to their production cuts, despite renewed pressure from U.S. President Donald Trump.

Prices slid on Monday, when many traders were out of the office attending IP Week, a series of industry events in London, after Trump called on OPEC to ease its efforts to boost the oil market. Prices were "getting too high", the president said.

"Yesterday was a typical price action you see during IP Week when you have a headline," said Olivier Jakob, oil analyst at Petromatrix. "But I don't think it will change anything in current OPEC supply policy."

Brent crude, the global benchmark, rose 24 cents to $65.00 by 1139 GMT, after losing 3.5 percent on Monday. U.S. West Texas Intermediate crude eased 7 cents to $55.41.

Expectations that U.S. crude inventories had risen for a sixth straight week limited the rally.

U.S. crude stocks were seen 3.6 million barrels higher in weekly inventory reports, underlining that supply is adequate in the world's top consumer. The first such report is due at 2130 GMT from the American Petroleum Institute.

Oil is up about 20 percent since the start of the year, when the Organization of the Petroleum Exporting Countries and other producers, such as Russia, began cutting production in an effort to reduce a global glut.

Saudi Arabia and other OPEC members are likely to be cautious about relaxing their supply-cut plan, Jakob said, after a boost in output in the second half of last year ahead of U.S. sanctions on Iran led to a steep slide in prices.

Oil broker PVM took a similar view.

"Will the kingdom budge and increase production or at least keep it steady," said PVM's Tamas Varga. "Just two weeks after announcing deeper cuts, it would be a capitulation."

An OPEC source, in comments to Reuters on Tuesday, agreed with the analysts' views.

U.S. sanctions against OPEC members Iran and Venezuela have also contributed to the gains and are providing a floor for prices, analysts say.

Optimism about a U.S.-China trade deal also helped prices to rally.

Trump on Monday said he may soon sign a deal to end a trade war with Chinese President Xi Jinping if their countries can bridge remaining differences.


By Alex Lawler and Koustav Samanta

Categories: Finance Government Update Offshore Energy Shale Oil & Gas Energy Drilling

Related Stories

Malaysia’s Petronas and Oman’s OQEP Strengthen Oil and Gas Ties

Southeast Asia’s 2GW Cross-Border Offshore Wind Scheme Targets 2034 Buildout

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

Floating Offshore Wind Test Center Planned for Japan

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

One Shelf Drilling Rig Up for New Job in India, Other for Disposal

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Current News

Malaysia’s Petronas and Oman’s OQEP Strengthen Oil and Gas Ties

Southeast Asia’s 2GW Cross-Border Offshore Wind Scheme Targets 2034 Buildout

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

US Pressure on India Could Propel Russia's Shadow Oil Exports

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

ABL Secures Rig Moving Assignment with India's ONGC

Pakistan, Türkiye Deepen Oil and Gas Ties with Offshore Indus-C Block Deal

Eni-Petronas Gas Joint Venture Up for Launch in 2026

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com