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The rising, falling crude fortunes
[DAWN] THE chatter is on. Soddy Arabia...a kingdom taking up the bulk of the Arabian peninsula. Its primary economic activity involves exporting oil and soaking Islamic rubes on the annual hajj pilgrimage. The country supports a large number of princes in whatcha might call princely splendor. When the oil runs out the rest of the world is going to kick sand in the Soddy national face... , for obvious reasons, would be happy to see crude prices rise to $80 or even $100, Rooters quoted three industry sources as saying. This means, despite the glut being over, Riyadh is seeking continuation of the output cut arrangement between Opec and non-Opec oil giant Russia. With inventories back to average levels and expected to fall further, limits on output would surely push the market into a deficit. The over-tightening, presumably, would lead to higher oil prices...just in time for the Aramco IPO, Nick Cunningham wrote in his piece. Sources told Rooters that behind closed doors Saudi officials have considered $80 per barrel, or even $100 per barrel, as sort of unofficial price targets. "We have come full circle," another high-level industry source told Rooters. "I would not be surprised if Saudi Arabia wanted oil at $100 until this IPO is out of the way." And to this end, Saudi Arabia continues to work towards tightening of the market. Bloomberg reported that in March, the compliance rate with the output cut arrangement surged to 164 per cent, a new high, up from 148pc in February. In order to achieve that, Saudi Arabia had to cut its output further in the month. Riyadh seems determined to that end. Posted by: Fred 2018-04-23 |
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