JAKARTA (TheInsiderStories) – The global oil price touched its highest level since end of July after rose on the fifth trading days. This morning, West Texas Intermediate (WTI) oil prices for October delivery at US$58.18 a barrel and Brent oil prices for delivery in November also strengthened to $63.05 per barrel.
In the last five trading days until Tuesday (09/10) morning, WTI prices have accumulated a 7.86 percent increase from last week’ position of $53.94 per barrel and Brent oil prices jumped 8.22 compared end of last week. The international benchmark oil price was up 0.73 percent compared to yesterday’ closing price.
Some observers rated, a number of positive sentiments have supported the rise in the global oil prices since last week. The planned meeting of the United States (US) and China for trade negotiations was one of the causes. Then, the appointment of Saudi Arabia King Salman’ son as the new energy minister also give adrenalin to black gold price.
The newly Saudi Arabian energy minister Prince Abdulaziz bin Salman confirmed that he would continue the policy of limiting oil production to prop up the prices. He said that the OPEC+ alliance will take place in the long run.
This statement came after Russia reported higher production than the OPEC+ quota agreement in August. Not only Russia, OPEC also recorded higher production in August, a first jack up in production in this year, caused by increased supplies in Iraq and Nigeria.
Under the OPEC+ agreement, Saudi Arabia promised to reduce production by around 1.2 million barrels oil per day (MBOPD). As of the end of July, the middle east country’ oil production was 9.8 MBOPD, according to US’ Energy Information Administration (EIA) data.
Saudi Arabia is the world’ main oil exporter. US EIA data recorded last year’ desert oil crude exports reached 6.25 MBOPD. Naturally the development of production in Saudi Arabia will affect oil prices.
Recently, the Organization of Petroleum Exporting Countries (OPEC) agreed to extend restrictions on 1.2 MBOPD of crude oil supply until March 2020. The Joint Ministerial Monitoring Committee also took note of oil market developments, that economic bearishness is now increasingly prevalent, with major challenges and mounting uncertainties related to ongoing trade negotiations, monetary policy developments, as well as geopolitical issues.
It was also observed that oil demand growth for 2019 has been revised down since the last meeting to now stand at 1.14 MBOPD, and non-OPEC supply in 2019 is expected to grow at a robust pace of 2.14 MBOPD, year-on-year.
The committee also observed the potential consequences of these developments on global inventory levels, as well as overall market and industry sentiment. It also recognized the recent record high conformity levels to the voluntary production adjustments by all participating countries in the ‘Declaration of Cooperation’.
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