Russia prepared to raise oil output under US pressure

Sources stated that the nations of Saudi Arabia and Russia are discussing raising production of OPEC and non-OPEC oil by about one million barrels per day. On the other hand, the chief of OPEC mentioned that a complaint from the President of the United States, Donald Trump that high prices which resulted in triggering the idea of increasing the output of oil production. The energy ministers of Saudi Arabia and Russia mentioned that both of the nations are well prepared to ease the cuts in the output for the purpose of claiming customer worries about the adequacy in supply. In an addition to this, the energy minister of Saudi, Arabia Khalid al-Falih added that any such move would be very slow in nature so that the market is not shocked at all.

The raising of the production of oil would ease about seventeen months of strict supply curbs among rising concerns that a price rally has gone too far with oil LCOc1 having hit its highest point since late 2014 at about $80.50 dollars per barrel in this month. Mohammad Barkindo who is the Secretary-General of OPEC stated that OPEC has started a discussion about easing the cuts in production prices after a very critical tweet from the President of the United States, Donald Trump. In the previous month, Donald Trump wrote a tweet that OPEC has artificially boosted up the price of oil. Mohammad Barkindo told a panel with the energy ministers of both nations of Saudi Arabia and Russia in St. Petersburg, which is the main economic forum of the nation of Russia.

The Organization of the Petroleum Exporting Countries and allies which is led by Russia have come to the same terms for curbing output by about 1.8 million barrels per day through the year 2018 for the reduction of global stocks but the inventory overhang is now near the target of OPEC. In the month of April, pact participants cut the production by about 52 percent more than what was required along with falling output from crisis-hit country Venezuela helping OPEC for delivering a much bigger reduction than what was intended. Some of the sources who were quite familiar with the matter said that an increase of about 1 million barrels per day would lower compliance to 100 percent of the level that is agreed upon.

June 24, 2018 - 18:11
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