Although Saudi Arabia has benefited from oil's rally over the last two years, the government relies on a strong security relationship with the USA, giving Washington some influence in the debate over OPEC policy.
A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen before a news conference at OPEC's headquarters in Vienna, Austria, December 10, 2016.
Data from secondary sources, reported by OPEC monthly, showed Tuesday Saudi Arabia's oil output in May was 9.98 MMBPD - which is a 85,500 BPD jump over April's output, Kallanish Energy learns.
"The United States shows by far the biggest gain (about 75 percent of the total across 2018 and 2019), but recently this expansion has not been without stress", the report said, referring to a gap in recent weeks between the USA and European oil futures contracts.More news: Twitter reacts as Lionel Messi misses from the spot against Iceland
President Donald Trump declared on Twitter that "oil prices are too high" and "OPEC is at it again", implying he believes the world's largest oil producers are constricting supply beyond what is reasonable to support their ailing economies.
The rising stocks are in part a result of the surge in USA crude oil production C-OUT-T-EIA, which has jumped by 28 percent in the last two years, to a record 10.8 million barrels per day (bpd). They have shown discipline in limiting production since the start of past year, helping push up the benchmark price of global crude.
"Even if the Iran-Venezuela supply gap is plugged, the market will be finely balanced next year and vulnerable to prices rising higher in the event of further disruption", the Paris-based agency said. Brent crude, the global oil benchmark, settled down 1% to $75.94 a barrel on London's Intercontinental Exchange.
Russian Federation and Saudi Arabia are leading a campaign to justify rolling back some of the OPEC/NOPEC production cuts, and are facing opposition from a bloc within OPEC consisting of Iran, Venezuela, and Iraq who oppose boosting production, also because those three don't have the spare capacity to lift production, unlike Russian Federation and the Saudis. "This outlook for second half of 2018 warrants close monitoring of the factors impacting both world oil demand and non-OPEC supply that will shape the outlook of the oil market going forward".
Fund manager Pierre Andurand at Andurand Capital is bullish.
Oil prices were relatively flat in response to the uncertainty.