Energy ETFs Plunge as OPEC Looks to Higher Production

Irving Hamilton
May 26, 2018

As of 10:46 a.m. EDT, Brent was down $1.17 a barrel at $78.40; USA crude lost 85 cents to $71.35 a barrel.

US refiner Valero Energy Corp this year boosted its imports of Venezuelan crude ahead of USA sanctions over the country's disputed presidential election and as other customers received less of the OPEC-member's exports, according to Thomson Reuters trade flows data. However, Russia's Energy Minister Novak declined to comment on the same, saying that all proposals will be discussed in June's Vienna meeting.

He declared, "It's time for this president to stand up to OPEC; he's palling around with Saudi Arabia and the United Arab Emirates and all these other oil-rich countries.[Trump] should buck his oil industry buddies". With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High!

The increase in USA inventories came from a combination of reduced exports and rising imports; the latter is somewhat surprising, Flynn said, because Brent crude is currently trading at a $7 premium to US crude, making exports more advantageous right now.

Various analysts have been wondering whether the Saudis will manage to pull off the listing of 5 percent of Aramco this year, amid speculation as to which foreign stock market the Saudis will choose, if any, and if the price of oil would be high enough to support a high valuation for the company.

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In Europe, Nazi propaganda is not acceptable, said Weber, while in the USA it falls under freedom of expression. He said he'd give the other answers in writing, which only sparked more quibbling among the members.

Brent futures fell 37 cents, or almost 0.5 percent, to $79.20 a barrel by 0636 GMT, after climbing 35 cents on Tuesday.

The benchmarks are diverging as rising inventories in the USA weigh on American futures while risks to supply from Iran to Venezuela buoy Brent. "Geopolitical risks are likely to keep a relatively solid floor under the market".

Oil prices fell more than 2% towards $77 a barrel today as Saudi Arabia and Russian Federation said they were ready to ease supply curbs that have pushed crude prices to their highest since 2014.

A dearth of pipelines in West Texas' Permian Basin, the most prolific USA oil play, is leaving supplies trapped in the region. Total motor gasoline supplied (the agency's proxy for demand) averaged over 9.5 million barrels a day for the past four weeks, up about 1% compared with the same period a year ago. When OPEC, Russia and other major producers meet in June "we will do what is necessary" to reassure buyers, the minister said.

Week over week, US crude oil exports fell by 818,000 barrels a day, and USA production rose by 2,000 barrels a day to 10.73 million.

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