OPEC Doesn't Want Brent Over $60 a Barrel, Says Iran's Oil Minister

Brent Crude

On January 9, Brent crude futures were at $68.11 a barrel, 33 cents, or 0.5 percent, above their last close.

Analysts say U.S. output may have levelled off over the holidays.

Late Tuesday, trade group the American Petroleum Institute will release figures on domestic petroleum supplies, followed by Wednesday's EIA figures.

According to Iran's oil ministry news service Shana, Bijan Namdar Zanganeh said "members of the Organization of the Petroleum Exporting Countries (OPEC) are not keen on increased Brent Crude prices to above 60 dollars per barrels because of shale oil".

OPEC is cutting output by even more than it promised and the restraint is reducing oil stocks globally, a trend most visible in the United States, the world's largest and most transparent oil market. A weekly decline in the number of USA drilling rigs led both contracts to a higher close on Monday (http://www.marketwatch.com/story/api-data-reportedly-show-a-weekly-drop-in-us-crude-supplies-2018-01-03).

Standard Chartered expects oil demand growth to outpace supply growth from non-OPEC countries in both 2018 and 2019, continuing to be the main supporter of prices, analysts wrote Tuesday.

Pump jacks bring oil up from wells in North Dakota.

Most recently, traders and oil market observers are waiting to see whether President Donald Trump on Wednesday extends USA sanctions relief to Iran as part of the 2015 global agreement to curb the Islamic Republic's nuclear program.

Many producers, still suffering from a 2014 price collapse, are enjoying the rally, although they are wary it will spur rival supply sources.

Despite this, USA production is expected soon to rise above 10 million barrels per day, largely thanks to soaring output from shale drillers.

In its Short-Term Energy Outlook, released Tuesday, the agency said it expects US production to break above 11 million barrels per day in November 2019.

Some analysts have said a rise in US shale oil production could discourage OPEC and Russian Federation to maintain their deal to curb supply until the end of the year for fears of losing market share.

However, Innes added that Middle East turmoil would remain a key focus for oil markets and had the potential to "send oil prices rocketing higher".

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