Oil prices mixed, but pressure persists from plan to raise production

Oil prices fall as supply from top three producers set to rise

Oil prices fall as supply from top three producers set to rise

The output cuts helped revive the market at that time.

Saudi Arabia and Russia's potential policy shift doesn't materially change Goldman Sachs Group Inc.'s bullish oil outlook, the bank's analysts including Damien Courvalin said, reiterating a forecast of Brent at US$82.50 in the third quarter. Venezuela is now producing just 1.4 million barrels a day, down from 3 million barrels a day just a few years ago, while UBS AG Wealth Management forecasts a drop of about half a million barrels day from Iran.

Among the measures being considered by the government is to import cheaper petroleum products from non-OPEC nations like Russian Federation and the U.S., Roque said.

The creation of the Strategic Petroleum Reserve (SPR) is founded on a number of joint worldwide studies, according to the DOE-Oil Industry Management Bureau.

The excess in oil inventories, which has weighed on prices for three years, plunged in April to less than the five-year average for stockpiles in developed nations, according to people with knowledge of the data, Bloomberg said. Both the United States and European oil drops in the market as the global oil supply report increasing number of supply.

The fall in prices of oil for drivers has been welcome news as it has been for companies that purchase large amounts of energy.

A further shoe may be about to drop, though: Iran, which added 308,000 barrels over the same period, is facing the prospect of USA and global sanctions that could sharply trim its output.

"Some air is fizzling out of the market and position-squaring raises the likelihood of an overshooting to the downside in the run-up to OPEC's June meeting".

Any optimism, however, should be cautious.

The Saudis also have to balance the geopolitics of oil, striking a balance between their need for relatively high prices against the support of U.S. President Donald Trump in their struggle against regional rival Iran.

Record U.S. crude shipments to Asia are expected in the coming months, with a senior executive at a U.S. oil company estimating that the country will ship some 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia. There is hardly any chance for surprises, however.

However, with USA becoming a major exporter of oil, higher oil prices up to a certain level can actually be beneficial with consumer loss being offset by rising capital investments by United States oil companies. Subtropical Storm Alberto lost strength as it came ashore near Laguna Beach in Florida, bringing heavy rains that threaten the U.S. South with economic losses of $1 billion.

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