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World Oil gains 5% as Saudi Arabia mulls extending its output cuts

21:04  04 march  2021
21:04  04 march  2021 Source:   aljazeera.com

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Saudi Arabian Energy Minister Prince Abdulaziz bin Salman confirmed that the top crude exporter was extending its voluntary one million barrel per day production cut and would in coming months choose when to gradually phase out this reduction. “There is one thorn to the bullish cocktail though and Russia wants to boost output ,” head of oil markets at Rystad Energy, Bjornar Tonhaugen said in a note. Russia and Kazakhstan have been allowed modest production increases under the deal. “Russia aside, the biggest winner of an OPEC+ rollover is the US. With such price levels, which are now

Riyadh is considering extending its voluntary oil cuts of one million barrels per day into April, Reuters news reports. Ministers from the Organization of the Petroleum Exporting Countries and its allies, a grouping dubbed OPEC+, are meeting on Thursday to discuss whether to extend output cuts or loosen the taps and let more Oil prices rose nearly 5 percent on Thursday on a possible extension of voluntary output cuts by Saudi Arabia into April, as the Organization of the Petroleum Exporting Countries (OPEC) ministers and their allies continued to deliberate about the future of supply cuts .

Oil prices rose nearly 5 percent on Thursday on a possible extension of voluntary output cuts by Saudi Arabia into April, as the Organization of the Petroleum Exporting Countries (OPEC) ministers and their allies continued to deliberate about the future of supply cuts.

a person with a sunset in the snow: Ministers from the Organization of the Petroleum Exporting Countries and its allies, a grouping dubbed OPEC+, are meeting on Thursday to discuss whether to extend output cuts or loosen the taps and let more barrels hit the market [File: Andrew Cullen/Reuters] © Ministers from the Organization of the Petroleum Exporting Countries and its allies, a grouping dubb... Ministers from the Organization of the Petroleum Exporting Countries and its allies, a grouping dubbed OPEC+, are meeting on Thursday to discuss whether to extend output cuts or loosen the taps and let more barrels hit the market [File: Andrew Cullen/Reuters]

Global benchmark Brent crude futures were up $3.04, or 4.7 percent, at $67.11 a barrel by 10:57am ET (15:57 GMT), while United States West Texas Intermediate (WTI) crude rose $2.84 or 4.6 percent at $64.12.

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Saudi Arabia has directed the state oil company Aramco to increase its total possible oil production, or capacity. It announced the move at the Saudi Tadawul stock exchange Wednesday. A short time later, Abu Dhabi’s oil and gas company ADNOC said it was increasing production by 25 percent to 4 million barrels per day. Saudi Arabia is working to flood the market after another oil producer, Russia, refused to agree to oil production cuts . Worldwide, demand for oil is decreasing as the spread of the new coronavirus has interfered with travel, transport and other industries.

Saudi Arabia has abandoned efforts to support crude prices and is now preparing to flood global markets with huge volumes of cheap oil , a stunning shift in strategy that has pushed oil futures into a dramatic tailspin and set the stage for a battle royale with rival producers including Russia and the United States. Saudi Arabia 's energy minister Prince Abdulaziz bin Salman, the eldest son of King Salman, cajoled ministers from OPEC and allied producers to deepen cuts last December to 1.7 million barrels a day.

Ministers from the Organization of the Petroleum Exporting Countries and its allies started a meeting at 13:00 GMT to discuss the future of an oil output cut.

Saudi Arabia is considering extending its voluntary oil cuts of one million barrels per day (bpd) by one month into April, an OPEC+ source told Reuters news agency on Thursday.

“If that’s the outcome, then it’s a far cry from what the market was potentially looking for in a 1.5-million-barrel increase just a couple of days ago, so it’s a change that at least in the short term will reflect in a price bounce,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Analysts and traders say that a four-month price rally from below $40 a barrel is out of step with demand and that physical sales are not expected to match supply until later in 2021.

But with prices above $60, some analysts have predicted OPEC+ producers will increase output by about 500,000 bpd.

In the US, despite a record surge of more than 21 million barrels in crude oil stockpiles last week, gasoline stocks fell by the most in 30 years as refining plunged to a record low due to a winter-weather freeze in the oil-producing state of Texas.

Also propping up sentiment, Yemen’s Houthi forces said they had fired a missile at a Saudi Aramco facility in Saudi Arabia’s Red Sea city of Jeddah. There was no immediate confirmation from Saudi authorities.

Oil prices continue to fall ahead of US inventories data .
Crude prices remain above the level needed to encourage US producers to increase production, some analysts say.Brent crude for May dropped 56 cents, or 0.8 percent, to $66.96 a barrel by 0414 GMT, while US West Texas Intermediate crude for April was at $63.56 a barrel, down 45 cents, or 0.7 percent.

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