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 Energy Government Update Offshore Energy Shale Oil & Gas Drilling

Related Stories

European LNG Imports Up with Asian Influx

ADES’ Fourth Suspended Jack-Up Rig Gets Work Offshore Thailand

Flare Gas Recovery Meets the Future

The Five Trends Driving Offshore Oil & Gas in 2025

ABS Approves Hanwha Ocean’s FPSO Design

Transocean’s Drillship to Stay in India Under New $111M Deal

Yinson and PetroVietnam JV Get FSO Contract for Vietnamese Field

Valeura Boosts Production at Jasmine Field with Five New Wells Now Onstream

Velesto’s Drilling Rigs Up for Automatization Overhaul Under New Tech Alliance

Beam’s AI-Driven AUV to Hit Offshore Wind Market in 2025

Current News

McDermott Concludes Work at PTTEP’s Kikeh Gas Field Off Malaysia

Japan's Mitsui Eyes Alaska LNG Project

Santos Hires Weststar-GAP for Timor-Leste Offshore Helicopter Services

Petronas Preps for Sabah-Sarawak Gas Pipeline Decom Op

European LNG Imports Up with Asian Influx

Sunda Energy Starts Environmental Survey for Timor-Leste Oil and Gas Field

Kazakhstan Looks to Improve Oil Production Agreements Terms

ConocoPhillips Takes Over Operatorship of Malaysian Oil and Gas Cluster

VIDEO: AIRCAT Crewliner takes Shape to Service Offshore for TotalEnergies Angola

China's CNOOC Aims for Record Oil and Gas Production in 2025

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