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Mettis Global News
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Oil Update: Oil holds as Saudi Arabia and others tighten supplies

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Oil markets held on their previous week gains on Tuesday, even as Saudi Arabia and Libya informed the market of tightening the supplies even further. The oil prices have recovered significantly over the last two months as demand for Gasoline spiked after hurricanes hit the United States’ along the coast.

Prices were helped by rising U.S. Shale output and fears of another Hurricane hitting the coast in the region. Hurricane Maria, which wreaked havoc on the Caribbean and South American countries may lead to further devastation if it moves upward towards Southern border of US.

Brent crude futures, the international benchmark for oil prices, were at $55.50 per barrel at 0653 GMT, up 2 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $50.01 per barrel, up 10 cents, or 0.2 percent, from their last settlement.

Saudi Arabia, the de facto leader of the cartel, OPEC, has vowed to curb output in an effort to offset the declining oil prices in the international market. The members and non-members (Russia) of OPEC have agreed upon to hold back output around 1.8 million bpd of supplies this year and into 2018.

Iraq’s Oil Minister, Jabbar al-Luaibi said on Tuesday that, the country is currently producing 4.32 million bpd of Crude oil per day compared against the number of 4.5 million during June last year.

Declining outputs from OPEC and other countries, are yet to yield any result for the oil prices as US is all set to witness record higher production of Shale in the month of October, continuing the ten month consecutive rise, as reported by US Government. US authorities informed that, Shale production is expected to rise during the month of October across Seven Shale Plays by around 79,000 bpd to 6.1 million bpd.

“Technological advancements continue to make inroads in the U.S. shale industry, boosting well-level economics … 80 percent of the cost base is below $60 per barrel (and) break evens have fallen a further 15 percent just in the last year,” Barclays bank said in its September market outlook.

Posted on: 2017-09-19T12:52:00+05:00