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The US West Texas Intermediate (WTI) crude futures ended at $66.78 per barrel, down $1.1 or 1.6 percent.

US and European oil prices diverged on Tuesday, with concerns about global oil supply still acting as a weight on West Texas Intermediate crude.

The major trigger for the drop was instigated by none other than Saudi Arabia, the world's largest oil exporter and kingpin of the OPEC oil cartel. "Whether it is a million barrels [or] more or less, we think we'll have to wait until June before making that announcement", he added.

New U.S. sanctions that may hit Iranian oil exports and plunging Venezuelan crude production have raised fears of global supply disruptions, sending prices above $80 a barrel in May.

Oil prices surged to their highest level in over three years last week, and strategists were marveling that prices had shot up so quickly.

US oil production has surged by more than 27 percent in the last two years to 10.73 million barrels per day (bpd).

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The news comes amid reports quoting Russia's and Saudi Arabia's energy ministers as saying they are negotiating a ramp-up of production ahead of the end-2018 deadline. Prime Minister Dean Barrow in a press conference recently said that prices would be going up due to the rise in price on global markets.

Saudi Arabia, recently made a decision to do an initial public offering (IPO) of its state-owned company Aramco, and the future valorisation of the company will be based on the price of oil.

In early 2017, the oil price started to see a slow and steady recovery after the Organization of the Petroleum Exporting Countries (OPEC) reached a deal to curb oil supply.

Saudi Arabia and Russia's proposal to revive production signals supplies are now tight, and isn't a bearish development, Goldman analysts including Damien Courvalin wrote in a report.

"Market participants remain unsure how quickly an exit strategy can be implemented and whether it will go beyond just balancing the output drop from Venezuela", said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London. There is no settlement on Monday because of the US Memorial Day holiday.

There is also reason to be bullish for the fact that, according to some analysts, the additional supply that OPEC and Russian Federation plan to bring online would "barely" compensate for the loss of production from both Venezuela and Iran. USA crude CLc1 was up 40 cents at $67.13.


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