Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
Oil prices have been gradually rising in recent weeks. pushed up by a drop in U.S. inventories and reports about the initial public offering of Saudi Arabia’s national oil company. But a larger bearish trend has taken hold this week. and it could persist.
Brent crude. the international benchmark. fell 0.3% to $60.34 in Friday morning trading. West Texas Intermediate futures fell 0.2% to $55.02. while the S&.P 500 was up 0.2%.
Friday’s weakness in oil builds on a three-day losing streak for the commodity. WTI was down 4.8% from Tuesday through Thursday. and Brent fell 3.5%.
Oil started September in relatively strong shape. Some oil stocks. such as Exxon Mobil. have outperformed the broader market.
Some bullish factors have been at play. Saudi Arabia could list shares of Aramco. the state-run oil company. as soon as next year. Market watchers expect the country to do what it can to prop up oil prices ahead of the event.
The new Saudi energy minister. Prince Abdulaziz bin Salman. was able this week to get Iraq and Nigeria. which had been violating an OPEC agreement on production cuts. to rein in output. Platts editor Herman Wang called the move “a step in the right direction for the coalition’s efforts to shore up flagging crude prices.“
But Saudi Arabia can only do so much at this point. In June. the U.S. overtook Saudi Arabia and Russia as the world’s largest oil exporter. according to the International Energy Agency. The U.S. may also be willing to make a deal with Iran to allow it to export oil after hawkish adviser John Bolton was pushed out of the White House.
OPEC’s own researchers forecast a demand slump ahead. Expectations that supply will far outpace demand in 2020 remain the most important driver of oil prices.
“While the relentless stock builds we have seen since early 2018 have halted. this is temporary.“ the IEA wrote on Thursday. “Soon. the OPEC+ producers will once again see surging non-OPEC oil production with the implied market balance returning to a significant surplus and placing pressure on prices. The challenge of market management remains a daunting one well into 2020.“
