Latest news with #Opec+'
Business Times
03-08-2025
- Business
- Business Times
Oil slips after Opec+ agrees to hike output in September
[SINGAPORE] Oil prices slipped in early Asian trade on Monday after Opec+ agreed to another large production hike in September. Brent crude futures fell 43 cents, or 0.62 per cent, to US$69.24 a barrel by 2218 GMT while US West Texas Intermediate crude was at $66.94 a barrel, down 39 cents, or 0.58 per cent, after both contracts closed about US$2 a barrel lower on Friday. Opec+ agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, as concerns mount over potential supply disruptions linked to Russia. The move marks a full and early reversal of Opec+'s largest tranche of output cuts, plus a separate increase in output for the United Arab Emirates amounting to about 2.5 million bpd, or about 2.4 per cent of world demand. In a statement following the meeting, Opec+ cited a healthy economy and low stocks as reasons behind its decision. 'The actual increases since April have been smaller than the headline number and are primarily composed of barrels from Saudi Arabia and the UAE (United Arab Emirates),' RBC Capital Markets analyst Helima Croft said in a note. 'The bet that the market could absorb the additional barrels seems to have paid off for the holders of spare capacity this summer, with prices not that far off from pre-tariff Liberation Day levels.' REUTERS
Business Times
03-08-2025
- Business
- Business Times
Opec+ makes another large oil output hike in market share push
[LONDON] Opec+ agreed on Sunday (Aug 3) to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, as concerns mount over potential supply disruptions linked to Russia. The move marks a full and early reversal of Opec+'s largest tranche of output cuts plus a separate increase in output for the United Arab Emirates amounting to about 2.5 million bpd, or about 2.4 per cent of world demand. Eight Opec+ members held a brief virtual meeting, amid increasing US pressure on India to halt Russian oil purchases – part of Washington's efforts to bring Moscow to the negotiating table for a peace deal with Ukraine. President Donald Trump said he wants this by Aug 8. In a statement after the meeting, Opec+ cited a healthy economy and low stocks as reasons behind its decision. Oil prices have remained elevated even as Opec+ has raised output, with Brent crude closing near US$70 a barrel on Friday, up from a 2025 low of near US$58 in April, supported partly by rising seasonal demand. 'Given fairly strong oil prices at around US$70, it does give Opec+ some confidence about market fundamentals,' said Amrita Sen, co-founder of Energy Aspects, adding that the market structure was also indicating tight stocks. The eight countries are scheduled to meet again on Sep 7, when they may consider reinstating another layer of output cuts totalling around 1.65 million bpd, two Opec+ sources said following Sunday's meeting. Those cuts are currently in place until the end of next year. Opec+ in full includes 10 non-Opec oil producing countries, most notably Russia and Kazakhstan. The group, which pumps about half of the world's oil, had been curtailing production for several years to support oil prices. It reversed course this year in a bid to regain market share, spurred in part by calls from Trump for Opec to ramp up production. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The eight began raising output in April with a modest hike of 138,000 bpd, followed by larger-than-planned hikes of 411,000 bpd in May, June and July, 548,000 bpd in August and now 547,000 bpd for September. 'So far the market has been able to absorb very well those additional barrels also due to stockpiliing activity in China,' said Giovanni Staunovo of UBS. 'All eyes will now shift on the Trump decision on Russia this Friday.' As well as the voluntary cut of about 1.65 million bpd from the eight members, Opec+ still has a 2-million-bpd cut across all members, which also expires at the end of 2026. 'Opec+ has passed the first test,' said Jorge Leon of Rystad Energy and a former Opec official, as it has fully reversed its largest cut without crashing prices. 'But the next task will be even harder: deciding if and when to unwind the remaining 1.66 million barrels, all while navigating geopolitical tension and preserving cohesion.' REUTERS


Observer
05-07-2025
- Business
- Observer
Opec+ decision to raise production a ‘calculated risk'
MUSCAT, JULY 5 A leading Omani energy expert has described Opec+'s decision to raise oil production by 548,000 barrels per day (bpd) starting August as a 'calculated risk' based on encouraging market signals. The move, announced on Saturday, July 5, following a virtual meeting of eight oil producing nations of the Opec+ alliance, came as a surprise to analysts who had anticipated a more modest increase of 411,000 bpd. The so-called 'G8' group—comprising Oman, Russia, Saudi Arabia, Algeria, Iraq, Kazakhstan, Kuwait, and the UAE—has been gradually unwinding a series of voluntary production cuts aimed at stabilizing the market. In a statement, the Opec Secretariat cited a 'steady global economic outlook and healthy market fundamentals, reflected in low oil inventories,' as justification for the higher-than-expected production increase. The Opec+ alliance is currently implementing two distinct voluntary production cuts outside the formal Opec+ framework: One involving 1.66 million bpd, in place until the end of 2025, and another 2.2 million bpd reduction, effective through Q1 of this year Commenting on Saturday's decision, Ali al Riyami, an energy analyst and former senior official at Oman's Ministry of Energy and Minerals, said the move reflects a deliberate strategy rather than a gamble. 'This adjustment is notably larger than previous hikes, raising a critical question: is Opec taking an uncalculated risk, or is this a measured gamble?' said Al Riyami. 'In my view, it's a calculated risk backed by several supportive market signals. Seasonal summer demand is typically strong, and the easing of US–China trade tensions, along with dollar weakness, could help sustain global oil demand.' He added that the timing of the announcement aligns with Opec+'s broader strategy to gradually unwind voluntary cuts ahead of Q4, when a significant supply surplus is expected, possibly extending into early next year. 'Ultimately, the hope is that the market will interpret this move constructively and that oil prices won't come under pressure come Monday,' Al Riyami noted in a social media post. Initially, the Opec+ group had committed to raising output by 137,000 bpd each month through September 2026. However, this pace was only sustained in April. In the following months—May, June, and July—production was ramped up by 411,000 bpd, with the new 548,000 bpd increase marking a further acceleration in August.
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Business Standard
04-06-2025
- Business
- Business Standard
Why are crude oil prices rising? Check reasons, outlook & trading strategy
Short term supply fear drives oil prices higher Oil prices began June on a strong footing, rising by 5 per cent in just two trading sessions. This surge has largely overshadowed Opec+'s recent decision to increase output by 433,000 barrels per day (bpd) in July. Brent crude, the global benchmark, is holding above $65, while US crude (WTI) has risen above $63. The rally is primarily driven by short-term supply concerns rather than a significant increase in demand. Wht are oil prices rising? One of the key factors fueling this rally is the outbreak of wildfires in Alberta, Canada's primary oil-producing region, which accounts for 80 per cent of the country's output. The fires have forced the suspension of approximately 350,000 bpd, or 7 per cent of Canada's daily production. A similar event in 2024 disrupted 400,000 bpd and contributed to a spike in global oil prices. In addition to the Canadian disruption, geopolitical tensions are adding to supply fears. Uncertainty surrounding a potential nuclear deal with Iran and the increasing vulnerability of Russian oil infrastructure to Ukrainian drone attacks have heightened concerns about global supply stability. Meanwhile, Opec+ announced on May 31, 2025, that it would raise crude oil output for the third consecutive month, despite internal disagreements led by Russia. Saudi Arabia is aggressively pursuing market share, which has exerted downward pressure on prices. The group plans to increase production by 411,000 bpd in July, having already restored 1.37 million bpd of the planned 2.2 million bpd by the end of 2026. As of May, the global oil market is in surplus by approximately 0.5 million bpd, a figure expected to exceed 1 million bpd by year-end. The next Opec+ meeting is scheduled for July 6, 2025, where the group will decide on August production levels. Opec+ has emphasised flexibility, indicating that production increases could be paused or reversed depending on market conditions. In the United States, lower crude prices are beginning to impact energy producers. The latest Baker Hughes data shows that the US oil rig count fell by four to 461, marking the fifth consecutive weekly decline and a 6 per cent year-over-year drop. The Permian Basin, which accounts for 46 per cent of US crude oil production, has seen a 22 per cent decline in rig count by the end of May. Some fields in the region have breakeven costs as high as $96 per barrel. While production from the Gulf Coast remains stable at around 1.8 to 1.9 million bpd, contributing 22–25 per cent of total US output, overall US crude production has slipped slightly below its March peak of 13.45 million bpd. Oil demand outlook On the demand side, signs of a slowdown are becoming evident. In the US, the volume of crude oil and petroleum products supplied fell to 19.95 million bpd in March, the lowest level since March 2024. In China, crude oil imports declined by 2 per cent in 2024—the first drop in two decades—and early 2025 data suggests continued weakness. Together, the US and China account for over 35 per cent of global crude oil demand, making these trends particularly significant. Macroeconomic indicators are also weighing on the market. The OECD, recently, cut its global GDP growth forecast for 2025 to 2.9 per cent from 3.1 per cent. In China, the May Caixin Manufacturing PMI fell sharply to 48.3, marking the steepest contraction in more than two and a half years. In the US, the ISM Manufacturing Index dropped to 48.5, while imports hit a 16-year low and exports fell to a five-year low, possibly due to retaliatory tariffs. Additionally, rising US Treasury yields have pushed long-term mortgage rates close to 7 per centm putting pressure on the housing market. Oil prices and trading strategy for crude Looking ahead, the upside for crude prices appears limited. The recent rally has been driven more by geopolitical risks than by fundamental demand. With global supply already in surplus and economic indicators pointing to a slowdown, prices are unlikely to sustain higher levels. WTI faces key resistance between $65 and $67. While short-term prices may test the $65 mark again, the long-term outlook remains bearish and we expect WTI to average around $57-$58 by end of 2025 due to expected supply surpluses and weakening demand.


The National
06-04-2025
- Business
- The National
Trump tariffs and slumping oil drag Middle East stocks to lowest level since 2020
Stock markets in the Middle East suffered their worst rout in five years, dragged lower by slumping oil prices and investor concerns that the new "universal" tariffs imposed by the administration of US President Donald Trump could disrupt global trade and stunt economic growth. In Saudi Arabia, the Arab world's largest economy, the benchmark Tadawul index slid by as much as 6.1 per cent on Sunday, its worst showing since 2020. It managed to regain some lost ground and was down 5 per cent at 1.10pm, UAE time. Stocks slumped across sectors, more noticeably in energy as well as the real estate, professional services and consumer-related services sectors. Shares in Saudi Aramco, the world's biggest oil-exporting company, were down 4.75 per cent. Oil prices had plunged to their lowest levels in more than three years on Friday, as China hit back against Mr Trump's tariffs with its additional levies on US goods. Opec+'s surprise decision to boost oil supply added to the heavy selling. Bourses in Kuwait and Qatar also dropped by more than 5.5 per cent during trading. The Abu Dhabi Securities Exchange and the Dubai Financial Market in the UAE are closed on Sundays. They shed 0.76 per cent and 1.51 per cent, respectively, at the end of trading on Friday. The US imposed a sweeping "universal baseline tariff" of 10 per cent through an executive order on what Mr Trump called 'liberation day' on Wednesday. The tariff went into effect on Saturday. The six-nation economic bloc of the GCC – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – along with Mena nations Egypt, Iran, Lebanon, Morocco and Yemen, all received the minimum 10 per cent tariff. Syria was the hardest hit at 41 per cent, followed by Iraq (39 per cent), Libya (31 per cent), Algeria (30 per cent), Tunisia (28 per cent) and Jordan (20 per cent). More to follow...