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Crude oil futures were lower during mid-morning trading in Asia on Monday,
with the Brent futures contract falling close to 2% amid profit taking while
the markets were looking to the future for increasing the supply of OPEC and its allies after
their meeting over the weekend.
At 10:30 am, Singapore time (02:30 GMT), ICE August Brent futures contract
Friday's $ 1.43 / b (1.89%) drop to $ 74.12 / b, while the NYMEX August
The unrefined light oil contract decreased from 24 cents / b (0.35%) to $ 68.34 / b.
The two benchmark contracts stabilized on Friday after the OPEC meeting
where a consensus on the increase in supply has been achieved, surprising market
participants who were expecting a disagreement between producing countries, including
Iran, analysts said.
OPEC put aside political differences on Friday and agreed to an exit
increase. Saudi Minister of Energy Khalid al-Falih, who has
increase in production – said volumes rose to just under 1 million
b / d. "
"The adoption of the 1 million b / d increase in crude production was observed
a first positive market reaction with Brent
reaching a high of $ 75.83 / b, "said IG market strategist Pan Jingyi.
"Coming unless the worst case of a 1.5 million b / d
increase as defended by a non-OPEC producer, Russia, the conclusion had come
about relief, "she added.
Prices, however, sagging in the midst of profit taking and the persistent market
uncertainties about the details of the increase, according to analysts.
"Prices jumped after the OPEC meeting on Friday and some profit taking
during Asian session put pressure on lower prices, "Phillip Futures
investment analyst Benjamin Lu said.
"Markets are recalibrating the results of the OPEC meeting after the
price reaction, but the general sentiment is still bullish, "he added.
While Falih said Saturday that OPEC and its allies would adjust
Individual oil production caps depending on the ability of each member to pump
more raw in their plan to add up to 1 million b / d of supply, Iranian
Oil Minister Bijan Zanganeh was opposed to increasing quotas under the
treat.
Friday's Zanganeh said full compliance – without any increase in
quotas – was "what I wanted from the moment I arrived" in Vienna.
"We have not discussed the number of barrels," he added. "We agreed to
respect 100% of the resolution among OPEC member countries. "
Falih refused to give an accurate timeline of how the 1 million b / d
to be strengthened, saying the meeting of the Joint Ministerial Monitoring Committee
would monitor market conditions.
Should he decide that the fundamentals of supply and demand justify
significant change in production strategy, the OPEC may call a
meeting, he said.
"We continue to believe that the basic production of OPEC and Russia
the increase will target higher production, stable inventories and not a sharp decline
in prices, "said analysts Goldman Sachs in a note on Saturday.
"In our opinion, the reality of today's deficit will probably prevail and we
reiterate our Brent price forecast of $ 82.50 / b in summer, "they added
"Nevertheless, our basic scenario remains that Brent prices go sequentially
down to $ 75 / b from here the end of the year. "
Elsewhere, data released by Baker Hughes on Friday showed that
The number of oil rigs in the United States decreased from seven to 1,052 for the week ended June
22.
The NYMEX crude contract price decline on Monday morning was not as
pronounced as the fall of Brent as the reduction in the number of oil rigs
provided support for NYMEX crude prices, analysts said.
At 02:30 GMT, the US dollar index was up 0.03% to 94,215.
– Avantika Ramesh, [email protected]
– Edited by Irene Tang, [email protected]
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