Oil tumbles more than $2

Reuters reported that the ministers are considering rolling back about half the production curbs or 1 million barrels a day. That appears to be changing, with the Aramco listing delayed until 2019 and Brent crude flirting with the kingdom's desired price of about $80 for most of this month.

Crude oil West Texas Intermediate (WTI) melted down 4.24% on Friday (trading at around 67.88) as Saudi Arabia and Russian Federation are considering ramping up production in order to compensate for the sharp decrease output from Venezuela and potentially also Iran which is at risk of sanctions from the United States. The rally has sparked worries that demand may falter, and the Organization of Petroleum Exporting Countries and its allies appear to be reacting to that idea with the first offer to boost output since January 2017.

The world's top oil trader, Vitol Group, said it will be near impossible to avoid U.S. sanctions on Iran, suggesting U.S. President Donald Trump's attack on OPEC's third-largest producer may have a bigger impact on the global crude market than many anticipate.

Now, with oil falling below $70 a barrel in the United States, a lower gas price is possible.

Oil prices are expected to withstand the possibilities of increased output however, thanks to a supply squeeze from Venezuela and an anticipated shunning of Iranian crude by USA allies, at least. "The OPEC and Russian rhetoric indicates they may put additional oil on the market to help meet demand".

While Russia and OPEC benefit from higher oil prices, which have risen by nearly 20% since the end of past year, their voluntary production cuts have allowed other producers to ramp up output and gain market share.

OPEC and its allies are scheduled to meet June 22 to discuss, among other things, the supply reduction put in place that has pulled since past year about 1.8 million b/d total from the market.


While the producers were determined just a month ago to keep supply restrained and boost prices, they're now changing course as oil's surge to a three-year high puts strain on the global economy and draws political heat from major consumers, notably the U.S., reported Bloomberg.

Trump's intervention gave typically strident voice to a concern held more widely in the USA and other consuming countries: oil's rally from less than $30 in early 2016 to more than $80 this month risked becoming a threat to global economic growth. In October 2016, Russia's oil output reached a 30-year high of 11.247 million bpd.

Russia's fears are not unfounded because America, for example, has increased production by over 25% to 10.7 million BPD. An OPEC committee charged with overseeing compliance with the deal said Friday that the deal's adherents are cutting 152% of what they promised.

Even though al-Falih's comments brought about an immediate price reaction, there are still reasons for people to be bullish as traders await the impact of US sanctions against Iran and wider political tensions in the Middle East.

Prices have moved higher not only because of OPEC and its allies' pullback, but also from threatened USA sanctions on OPEC member Iran, which has been exporting as much 1 million b/d, along with the energy industry collapse for OPEC member Venezuela, which also has cut into global supply.

The group is still debating whether resuming normal compliance with the accord would mean nations individually return to 100 percent compliance with their targets, or whether the group as a whole would aim for that level, the people said, asking not to be identified because the talks are private.

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