Crude falls below $80 on hopes of OPEC raising output

MID-DAY: Oil continues to slump on reports of higher production; North Korea US tensions weight Wall Street

Brent crude futures fell $2.35, or 3 per cent, to settle at $76.44 a barrel.

The excess in oil inventories, which has weighed on prices for three years, plunged in April to less than the five-year average for stockpiles in developed nations, according to people with knowledge of the data assessed at the meeting of the Joint Technical Committee of OPEC and other producers last week in Jeddah, Saudi Arabia. The U.S. benchmark is down from a peak of $72.58 earlier this week but still up 13.6% this year.

Pressure has been on the rise since the International Energy Agency published its monthly report acknowledging that the oil market was now balanced and that commercial glut in major industrial countries fell by about 1 million barrels.

Novak was also quoted as saying on Saturday he expected Iran to reduce its output by no more than 10 percent as a result of the move by the United States to withdraw from a nuclear deal and reinstate sanctions against Tehran.

Novak met this week on the sidelines of the St. Petersburg conference with his Saudi and Emirati counterparts.




The price of crude has dropped by nearly 7 percent since a recent high on Tuesday, a result of seemingly coordinated signals from Russian and Saudi officials that they are ready to increase production. With the overhang gone, and in an era of heightened global tensions, the price of oil is now close to a four-year high at around $79 per barrel for Brent.

ET reported that the recent rally in global crude oil prices has inflated India's crude oil import bill by 23 per cent to Dollars 8.2 billion in the month of April despite the quantity of imports in the month falling by 5 per cent, fresh data published by Petroleum Planning and Analysis Cell (PPAC) showed.

Russian Federation and Saudi Arabia have more than 3 million barrels of spare daily production capacity, so they are capable of more than compensating for production losses from Iran and Venezuela. But Flynn says even the higher figure would not be enough to offset the lower output from Iran and Venezuela.

Sector analysts expect that this may lead to petroleum subsidy to fall short on the back of steady rise in crude oil prices and revised target of providing 8 crore Liquefied Petroleum Gas (LPG) connections under Pradhan Mantri Ujjwala Yojana (PMUY).

The national average for a gallon of regular gasoline Friday was $2.97, almost 6 cents above a week ago and roughly 60 cents above a year ago, according to the AAA motor club. Russian President Vladimir Putin said on Thursday that the price of $60 "suits Russia".

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