Oil is getting whacked after report says OPEC might boost production

Saudi Arabia's Oil Minister Khalid al Falih talks to journalists at the beginning of an OPEC meeting in Vienna Austria

Only Russia produces more, at around 11 million bpd.

"We pride ourselves as friends of the United States", SG Barkindo told a panel with the Saudi and Russian energy ministers in St. Petersburg at Russia's main economic forum. Brent, the global benchmark, fell $2.68, or 3.4%, to $76.11 a barrel, on ICE Futures Europe.

The measures are likely to see producers with spare capacity raise output by as much as 1m b/d - or roughly 1 per cent of global oil demand - though the number could be lower depending on how they calculate production targets.

Oil fell below $70 a barrel in NY for the first time in two weeks as Saudi Arabia said it expects OPEC and its partners to increase supplies later this year, easing some of the restraint they've shown since early 2017.

Oil prices have risen to $80 per barrel, the levels unseen since late 2014. But now, they are losing market shares.

The joint production freeze was put in place to arrest a plunge in premium crude prices to below $30 a barrel in early 2016, and analysts said it largely succeeded in stabilizing prices in the $40 to $50 range.


Saudi Arabia has indicated that it could raise its oil output to offset any potential supply deficit.

"The moment is coming when we should consider assessing ways to exit the deal very seriously and gradually ease quotas on output cuts", Novak said in televised comments.

US crude oil and gasoline inventories showed a surprise weekly rise on Wednesday, against the market expectation of a decrease, triggering a decline in crude prices.

The matter is particularly sensitive because Russian Federation and the Saudis are proposing raising production to make up for losses from other members, notably a worsening slump in Venezuelan supply and a potential drop in Iran as renewed United States sanctions kick in.

FILE PHOTO: People walk past the logo of the Organization of the Petroleum Exporting Countries (OPEC) in front of its headquarters in Vienna, Austria September 21, 2017. "However, there is only a marginal downward revision, as the growth is expected to be supported by twin engines of consumption and gradual recovery in capex cycle in FY19", a report by Yes Bank said. "Some 10 percent is probably the maximum level", he said when asked if he agreed with an estimate that the sanctions could remove as much as 800,000 barrels a day from the market.

The plans to now lift production again come amid worries that Iran's exports will decline after the US's decision to pull out of the nuclear deal with Tehran and as output has collapsed in Venezuela (last week's elections will do nothing to reverse that trend in Venezuela). The U.S. government estimates the cushion at just 1.34 million barrels a day next year, below the 1.4 million reached in 2008 when oil prices surged to almost $150 a barrel.

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