Oil hits $74.10/barrel as OPEC moves toward spiking supply

  • US Crude imports from Nigeria drops By 62%
Oil prices grew more than 1 percent  at the weekend as the Organization of Petroleum Exporting Countries, OPEC, tried to agree a deal to increase output to compensate for losses in production at a time of rising global demand.
National Daily gathered that benchmark Brent crude LCOc1 was up $1.05 a barrel at $74.10 by 0925 GMT while U.S. light crude CLc1 was 80 cents higher at $66.34.
The cartel is meeting in Vienna together with non-OPEC oil producers to discuss output policy.
Saudi Arabia and Russia want to raise output, but some other OPEC members, including Iran, have opposed this.
Analysts expect OPEC to announce an increase in production of 500,000 to 600,000 barrels per day (bpd), which would help ease tightness in the oil market but would not be enough to create a glut.
“Any deviation from this figure is likely to generate a market response,” said Warren Patterson, commodities strategist at Dutch bank ING in Amsterdam. “A more relaxed policy will push Brent towards $70 a barrel, while restrictive measures will support crude oil back towards $80.”
Oil prices have been on a roller-coaster ride over the last few years, with the international marker, Brent, trading above $100 a barrel for several years until 2014, dropping to almost $26 in 2016 and then recovering to over $80 last month.
The group started withholding supply in 2017 and this year, amid strong demand, the market tightened significantly, triggering calls by consumers for higher supply.
Falling production in Venezuela and Libya, as well as the risk of lower output from Iran as a result of U.S. sanctions, have all increased market worries of a supply shortage.
Another big uncertainty for oil is the escalating dispute between the United States and its trading partners, which could hit U.S. crude oil exports to China.
Chinese buyers are already starting to scale back orders, with a drop in supplies expected from September.
Meanwhile, United States cut its crude oil imports from Nigeria by 62.08 per cent to 3.92 million barrels in March, the lowest monthly level since February 2016.
The latest data from the US Energy Information Administration obtained on Friday showed that the country imported 10.03 million barrels and 10.34 million barrels in January and February, respectively. It bought as much as 13.34 million barrels in October last year.
The US purchased a total of 24.28 million barrels of Nigerian crude in the first three months of this year, down from 25.97 million barrels in the same period last year.
The import of Nigerian crude by the US rose by 48 per cent to 112.92 million barrels last year, the highest annual level in five years, up from 75.81 million barrels in 2016 and 19.86 million barrels in 2015.