OPEC met to discuss production policies because disruptions in output continue to reduce the oil supply, setting the longest run of monthly gains in 5 years.
Nigerian supply has been affected by attacks, slashing supply to the lowest they have seen in 20 years. Producers resume operations after the fires that caused a dip in Canadian output let up.
Heavy arguments with Islamic State forces caused Libya to overtake loading terminals. Oil prices have steeply climbed since February due to the declining over-abundance of surplus and the lack of production from certain countries. Analysts say the Organization of Petroleum Exporting Countries (OPEC) will stick to the Saudi Arabian strategy to choke out rivals, and will more than likely reject any agreements proposed to limit output.
Jens Pedersen, a Danske Bank senior analyst, said, “Consolidation on the supply side has paved the way for the recovery of the oil price, and with oil production in the U.S. likely to fall further over the coming year, more of the same awaits. In the near term though, the rising dollar should limit further upside to the oil price.” Oil trading was up 27 cents to $49.60.
Ali al-Hasy, spokesman for PFG, said the smallest OPEC nation, Libya, overtook Bin Jawad after deadly eruptions of fighting wounded several and killed five guards.
United Arab Emirates Economy Minister said prices could reach $60 or more per barrel this summer. Lenders cut credit facilities for Delphi Energy Corp. again, causing a loss not felt in 14 years. Morgan Stanley has low expectations from OPEC’s June meeting, saying, “any surprise could have an outsized impact.”
Article written by HEI contributor Marcela Abarca.