Saudi-Iran Oil Rivalry Heats Up as OPEC Seeks Stable Prices
Saudi Arabia and Iran are giving no ground in their market share war, just days after OPEC announced an informal meeting to discuss ways to stabilize falling prices.
Oil’s return to a bear market last week prompted a flurry of words from members of the Organization of Petroleum Exporting Countries. The group’s president Mohammed Al Sada announced plans on Monday to hold an informal meeting in Algiers next month to discuss stabilizing the market, while Venezuelan President Nicolas Maduro said Tuesday he spoke to Saudi Arabia’s king about boosting prices.
The actions of some of the group’s biggest producers, however, were distinctly bearish. Saudi Arabia, the world’s largest crude exporter, boosted oil output to a record 10.67 million barrels a day in July, according to OPEC data published Wednesday. In Iran, production has risen to 3.85 million barrels a day -- the highest since 2008 -- according to comments from Oil Minister Bijan Namdar Zanganeh reported by the Fars news agency.
“It only gives one signal to the markets, that the Saudis are not here to scale back, especially in the face of Iranians bringing more oil to the market,” Abhishek Deshpande, an analyst at Natixis SA in London, said in a Bloomberg television interview. When OPEC meets in September “I doubt there’s going to be any concrete agreement.”
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http://www.bloomberg.com/news/articles/2016-08-10/saudi-iran-oil-rivalry-heats-up-as-opec-seeks-to-stabilize-price
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OPEC Says Weak Oil Demand Is Here to Stay
Weakness in global oil markets, which has dragged prices to a three-month low, may persist as demand slows seasonally and fuel inventories remain abundant, OPEC predicted.
There are “lingering concerns” that U.S. and European refiners may reduce processing rates as profits fade amid a continuing “overhang” of crude and refined fuels, the Organization of Petroleum Exporting Countries said in its monthly report. Gasoline consumption will taper off in the U.S. with the end of the summer-vacation driving season, it said.
“With the end of the driving season in the third quarter, gasoline demand could see a seasonal downward correction,” the organization’s Vienna-based research department said. High inventories of heating oil and diesel fuel around the world mean “the supply side could also continue exerting pressure,” it said.
Oil’s recovery from the 12-year lows reached in January sputtered out in early June amid plentiful stockpiles, faltering demand growth and signs that U.S. explorers could resume drilling. OPEC, which is sticking with a strategy to maximize its market share and let prices sag, said Monday it will hold informal talks on the sidelines of a conference in Algiers next month.
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http://www.bloomberg.com/news/articles/2016-08-10/opec-signals-oil-market-lull-may-persist-on-muted-fuel-demand
