OIL PRICE: ABOVE $78
REUTERS - Oil prices eased on Friday as Russia hinted it may gradually increase output, after having withheld supplies in concert with producer cartel OPEC since 2017.
Brent crude futures LCOc1 were at $78.63 per barrel at 0534 GMT, down 16 cents from their last close, and more than 2.2 percent below the $80.50 multi-year high they reached on May 17. Brent broke through $80 for the first time in more than three years earlier in May.
U.S. West Texas Intermediate (WTI) crude futures were at $70.60 a barrel, down 11 cents from their last settlement.
"Oil prices are now starting to drift a little," said Greg McKenna, chief market strategist at futures brokerage AxiTrader, adding that this was due to OPEC's and Russia's "moves toward an increase in production" at a meeting scheduled for next month.
The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) as well as a group of non-OPEC producers led by Russia started withholding output in 2017 to tighten the market and prop up prices.
But Russia, in particular, has been floating a potential end to the production cuts, with energy minister Alexander Novak saying on Thursday that restrictions on oil production could be eased "softly" if OPEC and non-OPEC countries see the oil market balancing in June.
"The Russians have always struck me as production cut tourists keen to get off the boat and crank up production as soon as inventories were stabilized and prices once again elevated ... That possibility is top of the mind for traders and as a result oil prices are slipping," McKenna said.
Still, the downside risk to oil prices could be limited by geopolitical factors.
"Oil prices, however, look primed to withstand the slip as heightened geopolitical risks from the Middle East, (and) raised prospects of a supply squeeze in Venezuela and Iran permeates global market sentiment," Benjamin Lu, an investment analyst at Phillip Futures in Singapore said in a note to clients.
HIGHER PRICES COME AT A COST
While Russia and OPEC benefit from higher oil prices, which have risen by almost 20 percent since the end of last year, their voluntary output cuts have opened the door to other producers to ramp up output and gain market share.
U.S. crude oil production has risen by more than a quarter in the last two years, to 10.73 million barrels per day (bpd). Only Russia produces more, at around 11 million bpd.
Output by producers like the United States, Canada or Brazil which are not bound by the OPEC/Russian led agreement to cut, will likely rise further as higher crude prices improve their profitability.
"With oil prices rising more than costs, average industry profitability has turned positive this year," Bernstein Energy said in a note this week, adding that the 50 largest listed oil companies globally "need $47 per barrel oil prices to break even in aggregate".
|September, 19, 14:07:00|
|September, 19, 14:03:00|
|September, 19, 13:59:00|
|September, 19, 13:55:00|
|September, 19, 13:51:00|
|September, 19, 13:47:00|
МИНФИН РОССИИ - Средняя цена на нефть Urals за период мониторинга с 15 августа по 14 сентября 2018 года составила $74,45568 за баррель, или $543,5 за тонну. Согласно расчетам Минфина России экспортная пошлина на нефть в РФ с 1 октября 2018 года повысится на $7,5 и составит $137,5 за тонну.
PLATTS - Saudi production has since risen to 10.42 million b/d in August, the country reported to OPEC in the organization's most recent monthly oil market report. Saudi Arabia's crude oil stocks, which have been declining steadily over the last three years, fell to 229.41 million barrels in July, down 11.4% since May 2017, the JODI data showed.
U.S. EIA - Crude oil production from the major US onshore regions is forecast to increase 79,000 b/d month-over-month in September from 7,515 to 7,594 thousand barrels/day , gas production to increase 961 million cubic feet/day from 72,127 to 73,088 million cubic feet/day .
REUTERS - Beijing on Tuesday said it would tax U.S. products worth $60 billion effective Sept. 24 in retaliation for tariffs imposed by U.S. President Donald Trump in an escalating trade war.