Oil complex rallies despite China/US trade tension - Oil

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Iran will not accept Saudi Arabia's proposal to increase crude output of Organization of the Petroleum Exporting Countries (OPEC), Iran's representative to the OPEC was quoted as saying Tuesday.

The move would effectively wipe out existing production cuts of 1.8 million bpd, which have helped rebalance the market in the past 18 months and lifted oil prices to almost $80 per barrel from as low as $27 in 2016.

USA sanctions will contribute to Iran and Venezuela potentially losing nearly 30 percent of their oil output next year, requiring extra supplies from the group's Gulf members, the International Energy Agency said last week.

By contrast Saudi Arabia and its Gulf allies have capacity to raise output and have said they were keen to meet calls from consumers such as the United States and China to cool down oil prices and help meet global oil demand.

Brent reached a 3-1/2-year high above $80 a barrel last month but has fallen steadily in recent weeks as Saudi Arabia, de facto leader of OPEC, has signaled it intends to raise production to stabilize prices. But oil price should not be out of reach.

They will meet in Vienna on June 22 to decide forward production policy. That crimped the country's ability to export crude, limiting supply and pushing up global prices.

In Russia meanwhile, private oil companies are finding it increasingly hard to justify the cutbacks to shareholders eager to cash in on the higher prices. These numbers suggest that USA and handful of other non-OPEC countries will more than meet global demand.

Crude has dropped more than 10 per cent from late May amid signs that Saudi Arabia and Russian Federation are seeking to lift output curbs that have eliminated a global surplus and boosted prices. The U.S. president repeatedly voiced his dissatisfaction with OPEC through social media accusing the cartel of driving up the oil prices, this consequently caused some turbulence in the market and resulted in Saudi Arabia's reaction.

The Minister of Petroleum & Natural Gas and Skill Development & Entrepreneurship Dharmendra Pradhan will lead an official delegation to participate in the 7th OPEC International Seminar organised by the Organisation of Petroleum Exporting Countries (OPEC) as a special guest in Vienna, Austria from 19-20th June 2018.The visit comes at a crucial time when the global crude oil prices are at the highest since the peak of 2014.

World oil demand in 2018 is forecast to grow by 1.65 mb/d, broadly unchanged from previous month's assessment, to stand at 98.85 mb/d.

Last week, Cushing inventories fell by 1.3 million barrels, government data showed on Wednesday.

Non-OPEC members including Russia, Oman and Mexico also agreed to cut 558,000 bpd off their production to stabilise the market.

Iran had been expected to oppose any rise in crude output, but it has now signaled it may support a small increase. Brent crude jumped $1.55 to $74.99 a barrel.

Escalating trade tensions between the US and China were also weighing on global markets including oil, said John Kilduff, partner at energy hedge fund Again Capital LLC in NY. "We are trying to control the prices", he told.

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