Russia, Saudi Arabia Extend Oil Partnership Indefinitely

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It is said, though, that US and Saudi Arabia have been discussing ending the OPEC/non-OPEC pact long before this week's meeting and Saudi is going to propose what is in fact a USA -induced decision in Vienna. Energy Ministers from all the OPEC countries including Saudi Arabia, UAE, Iran as well as Russia, China, Oman are expected to participate in the Conference.Pradhan will also visit Germany from 21-22nd June, 2018.

OPEC and its allies could consider a production increase of as much as 1.5 million barrels a day, Russian Energy Minister Alexander Novak said on Thursday, while Saudi Arabia has been discussing different scenarios that would raise production by between 500,000 and 1 million barrels a day, according to people familiar with the matter.

Following a sharp increase in crude prices from their sub-US$30 per barrel lows in 2016, the group on June 22 will meet in Vienna, Austria, to discuss forward policy.

That was still down $1.23, or 1.9 percent, from their last settlement.

As recently as April, Saudi Energy Minister Khaled al-Faleh had voiced support for the oil cut deal, saying the market had the capacity to absorb higher prices. The other, more immediate ones are the meeting of the OPEC cartel and the trade war between the U.S. and China. "A meaningful increase in long-haul flows from some of the key OPEC exporters would go a long way in turning the crude tanker market around, especially since it will impact the physical market as well as provide a boost to the all-important market psychology".

Meanwhile, US drillers added one oil rig last week, bringing the total count to 863, the highest number since March 2015 reported.

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"It's really a double whammy for Iran", Smith says, "from the perspective that because sanctions are being placed on them, they're not going to be able to export as much, because they probably won't be able to send crude into Europe".

Elsewhere, Venezuela, which faces the threat of U.S. sanctions and is in the midst of an economic crisis, is almost a month behind delivering crude to customers from its main oil export terminals, and chronic delays and production declines could breach state-run PDVSA's supply contracts if backlogs are not cleared soon.

While a compromise may be necessary to overcome vocal opposition from Tehran, Baghdad and Caracas, it could mean the resulting supply boost is smaller than oil traders - or indeed the U.S. President Donald Trump - had been anticipating. If allocated proportionally among all members of the group, only about two-thirds of that volume is likely to flow to the market because countries including Venezuela and Mexico are unable to raise output. Brent crude jumped $1.55 to $74.99 a barrel.

An OPEC technical panel has found that global oil demand is on pace to stay strong in the second half of this year, suggesting that the oil market could comfortably absorb a production increase without sending oil prices plummeting, Reuters reported on Tuesday, citing three OPEC sources.

China on Friday said it would retaliate by slapping duties on American export products, including crude oil. "We are trying to control the prices", he told.