Prices at the pump have fallen in many countries but will slowly rise as oil futures begin to regain their ground [Xinhua]
Oil prices in Asian and European markets appeared stable on Monday as US markets closed to mark the Independence Day national holiday.
Pushing against the $50 mark for weeks now, oil futures were given a push by Saudi Arabia’s energy minister Khalid Al Falih who was quoted by local media as saying that he believed markets were heading toward “balance”.
His statements came following a meeting with the new secretary-general of the Organization of the Petroleum Exporting Countries (OPEC) Mohammed Barkindo in the Saudi city of Dhahran.
Last week, US energy minister Ernest Moniz met with Al Falih at an energy summit in Beijing and voiced similar sentiments about oil markets shifting into balance.
“We still are in a situation of more production than demand. The gap is narrowing as global demand goes up slowly and production is not going up,” Moniz said at a press conference last week.
“Let’s say, within the next year, most of the people would expect a balance in the market.”
On Monday, international benchmark Brent crude futures (September) were trading at $50.49 a barrel at press time, up 0.28 per cent from opening trade.
US benchmark West Texas Intermediate crude futures (August) was up 13 cents at $49.21 at press time, up 0.27 per cent from opening trade.
But some analysts are warning that it may be difficult to maintain the $50 level because there is weaker demand, particularly in Asia, and greater production output in Russia and Iran, for example.
Year-on-year, Russian production output has increased about 1.14 per cent and its exports so far in 2016 have jumped just under 5 per cent to 5.55 million barrel a day, maintaining its position as the world’s biggest energy exporter.
Meanwhile, Iran has pushed forward with plans to increase its market share by 500,000 to one million barrels a day. Since US and EU sanctions were lifted in early 2016, Tehran has boosted production by more than 770,000 barrels a day and is aggressively seeking European and Asian buyers.
Iran and its biggest rival Saudi Arabia have traded barbs for the “collapse” of the recent Doha talks on capping oil output.
Iran, which did not attend the talks amid a diplomatic row and continuing Middle East proxy wars with Saudi Arabia, also said it would not curb its oil production.
The BRICS Post with inputs from Agencies
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