Oil prices rise after Russian-Saudi agreement to cap outflow

Oil prices rise after Russian-Saudi agreement to cap outflow

Oil prices rise after Russian-Saudi agreement to cap outflow

The world's two biggest oil exporters agreed Monday to extend production cuts for several months, sending the price of crude up 3.8 percent Monday to nearly $50 a barrel. USA crude was up $1.43 at $49.27 a barrel.

As traders in Europe hit their desks on Monday morning, Brent crude jumped above its 200-day moving average.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent. USA gold futures settled up 0.2 percent at $1,230. The contract gained $1.62 to $47.84/bbl last week.

Russia's energy ministry said extending the cuts, which were came into force in November, through to 31 March 2018 would demonstrate "producers' determination to ensure stability, predictability and incremental development of the market".

That is longer than the optional six-month extension specified in the deal, and shows that the battle to reduce overall supply has been more hard than originally anticipated, in part because of rising U.S. production.

Jennifer Lawrence Centers On Disturbing Poster For Darren Aronofsky's 'Mother!'
"A couple's relationship is tested when uninvited guests arrive at their home, disrupting their tranquil existence". The poster was debuted on Mother's Day Sunday (May 14) on Twitter by the film's writer/director Darren Aronofsky.

OPEC and the non-OPEC countries meet to decide policy on May 25 in Vienna, and OPEC has also invited two small producers not involved in the original deal, Egypt and Turkmenistan, to attend.

Asian markets were mixed in Tuesday trade, following the bounce in oil prices after the energy ministers of Russian Federation and Saudi Arabia announced output cuts should be extended till March 2018 and as investors largely shrugged off United States political news on President Donald Trump.

But an extension of the deal still might not be enough to balance markets.

"Therefore, a drastic downward shift in the market conditions will not lead to a rapid collapse of the USA oil production", the consultancy noted. Domestic output is on pace to hit a new high in July and possibly even 10 million barrels per day in August, according to analysts. There is fear that OPEC will decide to resume their war on the USA shale oil producers and flood the market again with crude oil. Each year, demand for crude oil increases by more than a million barrels per day between the first quarter and the third quarter.

Before we get into this topic, let me remind readers that crude oil prices are determined on the global market and natural gas & natural gas liquids ("NGLs") trade on regional markets.

Sega Could Be Planning To Resurrect Huge IPs
Back in the day, SEGA used to be a pretty big household name as far as gaming was concerned. It'll be interesting, going forward, to see what Sega looks to revive.

But the announcement that Saudi Arabia and Russian Federation both support continuing to cut output in the first quarter came as more of a surprise and jolted USA crude-oil futures to $49.66 in earlier trading.

But by extending them for a further nine months, and pledging to do "whatever it takes" to bring inventories down to the five year average, Saudi Arabia and OPEC are attempting to influence expectations.

"When the two biggest oil producers of the world reach a consensus on the extension of a supply cut, the market will listen", Tamas Varga, of oil broker PVM, said in a report.

The strength in oil prices sent US stocks to new highs.

The ability of USA drillers to respond quickly to higher prices has made it harder for The Organization of the Petroleum Exporting Countries to control the flow of oil, analysts have said.

Jeter's No. 2 retired by Yankees; Monument Park plaque unveiled
Williams was done. "Kid Bids Hub Fans Adieu" was the headline of John Updike's lovely piece in The New Yorker about that home run. In Yankees history, Jeter ranks among the top 10 players in batting average (.310), home runs (260) and runs batted in (1,311).

Related news