Published: Tue, October 18, 2016
Economy | By Melissa Porter

Oil price rises with Russian Federation comments on cutting production

Oil prices fell on Thursday after OPEC said its production had risen to the highest level in at least eight years and following reports of an increase in USA crude stockpiles.

Brent for December settlement dropped 73 cents, or 1.4 percent, to $52.41 a barrel on the London-based ICE Futures Europe exchange.

Global oil supply rose by 600,000 bpd in September, with non-OPEC supply climbing almost 500,000 bpd on higher Russian and Kazakh flows.

According to the report, global oil supply rose by 0.6 mn bpd in September, with non-OPEC up almost 0.5 mn bpd on higher Russian and Kazakh flows and OPEC at an all-time high of 33.64 mn bpd, on robust Middle East production.

However, sounding a note of caution, Fritsch said he had "significant doubts whether the (production cut targets) will actually be fulfilled" as rivalry between OPEC members, who are fighting aggressively for global markets share, could prevent an effective deal.

On Tuesday the International Energy Agency (IEA) said OPEC raised its production by 160,000 barrels per day in September to a record 33.64 million. Oil prices rallied after that announcement then, but later lost steam amid growing skepticism if OPEC would be able to agree to quotas and more importantly, to stick to its decisions.

Alexander Novak, Russia's minister of energy, moved to reassure oil-price watchers by reaffirming at a CNBC-moderated panel at the World Energy Congress in Istanbul that his country is prepared to join the oil-producing cartel OPEC in a production freeze.

In a report released in August, the IEA lowered its forecast of 2016 growth by 40,000 bpd to stand at 1.2 million bpd.

OPEC's September production number is its highest monthly number since 2008. "It's smart to pause because we are faced with the fact that we have a well-supplied market and USA producers will come back if prices rise".

The Organization of the Petroleum Exporting Countries on September 28 agreed to reduce output to a range of 32.50 million barrels per day to 33.0 million bpd, its first output cut since the 2008 financial crisis.

Markets unconvinced a long-awaited deal between the Saudi-led OPEC cartel and its non-OPEC members over output will ever be reached.

Here's what you need to know about crude oil prices today...

Earlier on Monday, Sechin said Rosneft is aiming to raise its oil production this year above the 4.1 million bpd it produced in 2015.

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