Oil fell on Monday as investors prepared for an extra 1 million barrels per day (bpd) of oil to hit the markets after OPEC agreed to raise production and as USA equity markets slipped on trade war fears.
And since not all countries in the OPEC and non-OPEC coalition have spare capacity, and those that increase production per the new agreement will lose their extra capacity, the market would be susceptible to any supply interruptions, according to Price Futures Group senior analyst Phil Flynn. Today's pledge to meet 100% compliance is an attempt by OPEC to address concerns of an undersupply scenario in which oil price increases to levels that would hinder global growth.
Dmitriev, one of the architects of the initial deal between Moscow and OPEC in December 2016, said that long-term Russia-Saudi cooperation "will ensure pricing stability on global markets and increase investments in the energy sector".
Dmitriev told Reuters he expected investments between the two countries to double in the next three years.
Brent crude futures, the worldwide benchmark for oil prices, were at US$74.92 (RM301.48) per barrel at 0127 GMT, up 19 cents, or 0.25 per cent from their last close.More news: Philadelphia 76ers trade 39th pick to the Lakers for future second, cash
Saudi Arabia and Russian Federation initially proposed raising output after curbs by OPEC and its allies since previous year helped eliminate a global glut and boosted Brent crude to US$80 a barrel for the first time since 2014.
Washington is pushing countries to halt imports of Iranian oil from November, a senior State Department official said, adding it will not grant waivers to sanctions. Some OPEC countries, such as Iran and Venezuela struggle with domestic issues and Nigeria's Oil Minister admitted several members are unable to increase output.
He also tweeted on June 13 that "Oil prices are too high; OPEC is at it again".
Accordingly, at the bi-annual meeting in Vienna last week, the oil cartel, along with its Non-OPEC allies, chose to increase its output by 600,000 bpd, six months ahead of the expiration of its existing agreement. Oil prices are artificially Very High!
Canary LLC CEO Dan Eberhart on the impact of the OPEC decision to boost oil production.
The minister had said that globally crude prices have gone beyond the threshold which can be sustained by the world.