Oil Prices Edge Lower After Recent Rally

The national consumer watchdog has said Australian motorists are directly paying for the extravagance of oil-rich Middle Eastern nations

The national consumer watchdog has said Australian motorists are directly paying for the extravagance of oil-rich Middle Eastern nations

US sanctions on Iran are also threatening to reduce oil exports from the OPEC producer.

Riyadh, Tehran's arch rival, has always been a close Washington ally, but direct pressure on a member of Organization of the Petroleum Exporting Countries (OPEC) over oil policies is rare.

Further weighing on prices has been rising USA output, which hit another record last week at 10.8 million bpd.

"Markets are forward-looking. The fact that Russia, Saudi Arabia and OPEC more broadly have started discussing raising output levels, you've got this pretty swift correction", said Tyler Richey, co-editor of the Sevens Report in Jupiter, Florida. Saudi Arabia took this decision because high oil prices could help the stock exchange float of the Saudi Aramco's stake. Prices have been trading under pressure following comments from Russian Federation and Saudi Arabia that they could consider curbing their output cuts when they meet on June 22.

The counsel responded negatively to Iran's plea, the source said, on the grounds that the ministerial agenda could not be amended because it had already been finalized. The other two did not specify a date for the call.

Prices had traded higher in early dealings, buoyed by reports Venezuela may not deliver some of its contracted crude oil exports on the heels of political upheaval.

"A consensus for higher oil prices and revenues will be the bedrock of every OPEC nation". Global reserves decreased by 0.4% year over year in 2017 and OPEC reserves dipped 0.3%, mostly due to lower production from Venezuela, the current world leader with reserves of almost 303 billion barrels.

OPEC will meet in Vienna on June 22 to decide whether the group and non-OPEC producers, including Russian Federation, should raise output to make up for any supply shortfall from Iran and Venezuela.

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The Iranian official also criticized a USA request for Saudi Arabia to pump more oil so that it could cover a drop in Iranian exports was "crazy and astonishing" and said OPEC would not heed the appeal, setting the stage for a tough OPEC meeting this month.

Iran and Venezuela have separately pleaded over the past week to their fellow OPEC members for support and solidarity against the US sanctions.

"This seems to be an intervention in OPEC's supply policy ..."

Some Gulf countries were "upset that there was no prior consultation with them", a separate source said.

Saudi Arabian Energy Minister Khalid Al-Falih said last month that supplies will likely be increased later this year. There's also been a shift away from long-term investment in the oil industry toward short-cycle spending. Analysts had expected a drawdown of about 2 million barrels for the period. This is due to a lack of new projects.

Oil prices were stable on Friday, supported by Venezuela's struggles to meet its supply obligations and by ongoing output cuts led by producer cartel OPEC, although surging United States crude output was looming over markets. When the USA announced it would reimpose sanctions on Iran in November, Ice Brent futures rose by $2.36/bl on the day.

OPEC exports increased to 578 billion dollars a year ago from 451,800 million dollars in 2016, stressed the group's Annual Bulletin of Statistics 2018. PVM Oil Associates strategist Tamas Varga said, Reuters reported.

The price of oil has been under pressure given the potential for a trade war escalating over Washington's pursuit of tariffs. "Consumers are very important for us".

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