U.S. crude stockpiles rise unexpectedly in week

Market report May 24 2018 12:01am The Times Oil investors fear Opec will turn taps back on Miles Costello

OPEC is looking closely at the nation's production drop to decide if the loss of supply will require action by the group, according to sources.

US crude stockpiles are forecast to have declined by 2.8 million barrels last week, which would be the third straight weekly fall.

Since 2017, financial sanctions on Venezuela and PDVSA and quality problems with some PDVSA's crude grades also have created obstacles for USA customers to import or pay for oil shipments from the South American country, affecting refiners such as PBF and Phillips 66. Brent crude futures jumped to a new four-year high of $80 a barrel last week as new USA sanctions on Iran and Venezuela, which would reduce supply further, appeared imminent.

A dearth of pipelines in West Texas' Permian Basin, the most prolific US oil play, is leaving supplies trapped in the region. So, for the working week that ended on May 18, the country's oil reserves fell by 1.3 million barrels.

"The big story" in the markets this year has been the sharp jump in oil prices, says The Observer.

Oil prices were mixed Wednesday after a surprise jump in US crude oil inventories, and following a report OPEC could reduce production cuts agreed to by numerous producers at its June meeting.

OPEC's third largest producer will be a key talking point when OPEC and 10 other oil producing countries meet in late June, after the United States made a decision to reimpose sanctions on Iran from November 5.

While triple-digit oil may be a way off in practice, talk that prices could top that barrier over the next 12 months is gaining traction.

West Texas Intermediate, the US benchmark for the price of oil, was down 2.53 percent to $68.92 per barrel.

At a time when India is looking at ways to keep rising fuel prices in check, a further increase in the per barrel price of crude oil (the deciding factor of domestic oil prices) may bring more pain for consumers in the future.

In the meantime, Russian Federation and Saudi Arabia could potentially ease their own oil production caps in an effort to keep prices under control. At the auction the previous day, the price decreased by $1,01 (1,27%) and has made on closing of $78,79 per barrel. Silver market on global level is relatively small when compared to its counter parts gold and Oil.

Russia's oil tsar Alexander Novak said ministers from the OPEC cartel and other members of the production pact would discuss how much to increase production next month.

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