OPEC, Russia rebuff Trump's call for immediate boost to oil output

Oil price jumps as Opec keeps output steady

While U.S. oil production is near a record high of 11 million barrels per day, subdued U.S. drilling activity points towards a slowdown in output. "The market is well-supplied", Saudi Energy Minister Khalid Al-Falih said after a meeting of OPEC and its allies over the weekend. This comes after the US Congress has reconsidered legislation aimed at preventing OPEC from manipulating oil prices.

"We're on the verge of some significant volatility in Q4 2018 because depending on the severity and duration of the Iranian sanctions, the market simply does not have an adequate supply response for a 2 million barrel a day disappearance of oil from the markets", Jaeggi said.

Oil prices have hit a four-year high of over $81 (£62) a barrel after Saudi Arabia and Russian Federation rejected calls by Donald Trump to increase production.

To reflect rising USA oil exports, CME Group Inc (CME.O) said on Monday it will launch a WTI Houston crude futures contract in the fourth quarter.

A source familiar with OPEC discussions told Reuters on Friday that OPEC and other producers have been discussing the possibility of raising output by 500,000bpd.

At the meeting in Algeria next Sunday, the Saudis hope to achieve their goal of making the alliance, formed two years ago to end the devastating oil price decline, more durable before the next big meeting in December.

He said: "My information is that the markets are adequately supplied". "The reason Saudi Arabia didn't increase more is because all of our customers are receiving all of the barrels they want".




The committee formed by OPEC and non-OPEC oil producers "was directed to study the 2019 outlook and present options on 2019 production levels to prevent market imbalance", the closing statement in Algiers added.

At the same time, fund managers have trimmed their net position in NYMEX and ICE WTI by 44 million barrels in the last fortnight.

But he said the trade war between China and the USA as well as Trump's sanctions on Iran were creating new challenges for oil markets.

A decade ago, Brent crude surged to almost US$150 a barrel, only to crash just months later as high fuel prices and the global financial crisis triggered a slump in demand.

While the opposition parties have blamed the government for the rise in prices, the Centre has reiterated its stand that prices in India are a function of global crude oil moves. "Undoubtedly the oil market is expected to be tight in coming months and if OPECs own numbers are to be believed global oil inventories are to fall in the remainder of the year", PVM Oil Associates strategist Tamas Varga said.

Mercuria sees possibility of $100 spike in fourth quarter.

The Saudis and their allies appear to be trying to walk a fine line between placating Trump and not putting so much oil into the market to cause prices to crash - as they did in 2014, damaging their petroleum-dependent economies.

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