S. Arabia pitches for oil output freeze extension

Marie Harrington
September 13, 2017

The Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de facto leader, and other producers including Russian Federation, have agreed to curb their output by around 1.8 million barrels per day until next March. Lower crude oil prices have a negative impact on oil producers and drillers such as Carrizo Oil & Gas (CRZO), Warren Resources (WRES), Atwood Oceanics (ATW), Transocean (RIG), and Diamond Offshore (DO).

Brent crude oil futures settled up 6 cents, or 0.1 percent, to $53.84 a barrel while U.S. West Texas Intermediate crude rose by 59 cents, or 1.2 percent, to $48.07.

Crude oil inched higher Tuesday morning, adding to yesterday's gains amid signs that OPEC will further extend its supply quota plan.

Global benchmark Brent crude futures, the benchmark for oil prices outside the USA, fell 0.30% to $53.62 a barrel.

Ratings agencies are weighing the impact of Hurricanes Harvey and Irma, two major storms systems that hit the southern United States and Caribbean islands over consecutive weeks.

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Analysts anticipate the power outages and the evacuation of the region may damp consumer appetite for crude. "There is also a lot of talk about whether OPEC is going to extend its deal or not and the market is weighing a lot of outcomes". Mark Zandi, the chief economist at Moody's Analytics, said the USA economy could suffer lost revenue from the storms and the estimate for third-quarter gross domestic product could drop a half point to 2.5 percent as a result. In the first half of this year, crude oil price declined by around 15 percent, which is its worst H1 showing in 19 years.

Al Falih hailed the efforts of the UAE to rebalance the market, the report said.

OPEC and a number of other producers including Russian Federation agreed in May to extend production cuts, originally agreed past year, into 2018 to ease a global supply glut and support the price of crude. "A similar production level is also anticipated for September", the Saudi ministry said.

In August, production rose in Nigeria, which has been exempted from output curbs, OPEC said.

Official data from the Energy Information Administration will be released Wednesday.

Other reports by TheSundaySentinel

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