After last week’s statement by the Saudi Arabia Minister of Energy Khalid al-falikha that the country could introduce measures to stabilize oil market, this Monday, oil prices continue to grow.
An informal meeting of OPEC, which includes 14 countries, is scheduled for the end of September. The September futures for crude oil WTI at NYMEX went up by 39 cents, and traded at the level of 44.88USD per barrel this morning. October futures for crude oil Brent at ICE Futures in London have grown by 0.75%, up to 47.32USD per barrel.
At the beginning of European session spot-price of crude oil Brent is near the level of 47.30 USD per barrel.
Three months ago, the Saudi crown Prince Mohammed bin Salman said in his interview to Bloomberg that Saudi Arabia would freeze oil production or reduce production volume only if other major oil-producing countries, including Iran would agree to do the same.
The Minister of oil of Iran Bijan Zanganeh said that the idea to limit production was just a joke. Oil production in Iran rose to 3.63 million barrels a day in July, approaching pre-sanctions level of 4 million barrels a day. According to analysts this fact may force Iran to agree to freeze oil production.
The rise in oil prices is also supported by optimistic forecasts of the International Energy Agency (IEA), which said last Thursday that excess of oil reserves will drop due to the high demand for oil in the world.
Meanwhile, last Wednesday, US Department of Energy reported about the increase in the commercial oil reserves by 1.055 million barrels in the week of July 30–August 5, which amounts to 523.6 million barrels of crude oil. This number is by 37.7% higher than the five-year average value for this time of the year.
Monthly OPEC report indicated that oil production in Saudi Arabia has grown to the record level of 10.67 million barrels a day in July. Total OPEC production in July has grown to 33.1 million barrels per day.
The number of active oil drilling rigs in the USA continues to increase. Last week their number has increased by 15 rigs, to 396 units.
The excess of oil on the US market and in the world is growing.
Statement by the Saudi Arabia's Minister of Energy about the readiness to accept agreement on freezing oil production can be regards as just a verbal intervention. This Wednesday, the US Ministry of Energy will issue oil reserves report for the previous week. If stocks rise, the price of oil can drop.
Minutes of the FOMC meeting, which will become known on Wednesday (21:00 GMT+3), can also have impact on oil prices. If the minutes indicate possibility of the rate hike in the USA in the near future, the USD may grow in the currency market, while commodity prices, including oil can decline.