Markets

OPEC sees U.S. shale oil stealing market share until late-2020s

OPEC sees U.S. shale oil stealing market share until late-2020s

US light crude CLc1 was $1.25 higher at $72.03.

He said: "We are on the verge of some significant volatility in Q4 2018 because depending on the severity and duration of the Iranian sanctions, the market simply does not have an adequate supply response for a 2 million barrel a day disappearance of oil from the markets".

OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, on Sunday effectively rebuffed Trump's demand for moves to cool the market.

Fibonacci projections at $82.84 (200% of the upleg from $77.36) and $83.89 (Fibo 238.2%) mark next targets, however, bulls may accelerate further in unobstructed positive environment.

While U.S. oil production is near a record high of 11 million barrels per day, subdued U.S. drilling activity points towards a slowdown in output.

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Saudi Arabia signalled the kingdom is in no rush to bring oil prices down from current levels.

In addition to US sanctions cutting Iranian supply, the world is also dealing with a decline in Venezuelan oil production due to an economic crisis in the Latin American nation, according to Trafigura's Luckock.

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The tightening US market came ahead of sanctions that Washington plans to implement against Iran's petroleum exports from early November.

Iranian Oil Minister Bijan Zanganeh said on Sunday he hoped decisions taken by the OPEC and non-OPEC ministerial committee would not be affected by U.S. President Donald Trump's tweets on oil producers. "The markets are adequately supplied".

Oil has rallied since the lows of August as speculation swirls over whether OPEC and its allies will boost output as the sanctions on the Middle East nation's exports nears.

"The OPEC monopoly must get prices down now!"

"The OPEC and the Middle Eastern producers' actual crude production capability is up ... but it's the disruption in supply and exports [such as the economic sanctions on Iran and Venezuelan economic turmoil] that's supporting the oil prices", said Chris Midgely, global director of analytics at Platts.

He further said all producers - OPEC and non-OPEC - wanted to keep the price of oil at around $80 per barrel.

"Despite the growing uncertainties surrounding market fundamentals, including the economy, demand and supply, the participating producing countries continue to seek a balanced and sustainably stable global oil market, serving the interests of consumers, producers, the industry and the global economy at large", said the final communiqué of the JMMC, presented during a news conference following the 10 meeting. Higher gasoline prices for United States consumers could create a political headache for Republican Trump before mid-term congressional elections in November. She says the question of how much Trump's administration can control the Iranian oil market is only one part of the equation.

The supply picture is looking increasingly worrying, with Venezuela and Iran the two principal factors driving up oil prices in the fourth quarter.