OPEC Committee Recommends Nine-Month Oil-Cuts Extension Congress has already ordered the U.S. Energy Department to sell 25 million barrels of reserve oil in fiscal 2018 to fund government programs
Long term, reducing the oil reserve might be a good thing for the market, said Carl Larry, principal at Oil Outlooks and Opinions LLC, in Houston.
In the long-term, the effect on the global market would be “negligible” relative to the size of OPEC’s output curbs.
The administration is targeting 16 million barrels in deliveries in the first half of the year.
It has earmarked 190 million barrels — about 27 percent of the reserve at the time — to raise money for unrelated government programs.
With OPEC cutting its oil reserves by $ 50 a barrel
referring to While U.S. shale output is set for “robust growth” in the second half of the year, “we see the oil market tightening further in the coming quarters,” he said.
But Saudi Arabia’s Energy Minister Khalid Al-Falih said the strategy is working and stockpiles will drop faster in the third quarter.
“We believe the next big move for prices is up as oil inventories fall at an even faster pace in the coming weeks,” Giovanni Staunovo, a Zurich-based commodity analyst at UBS Group AG, said by email.
Many expect the driving season that’s starting with the Memorial Day holiday to help ease the glut.
The nation’s busiest oil patch, the Permian Basin of west Texas and New Mexico, added just one, its smallest gain in more than a month.
The advent of high oil prices for OPEC is a great win for investors
The OPEC oil price deal is working, and it’s injecting life back into the American oil industry.
And Money Morning Global Energy Strategist Dr. Kent Moors says oil prices could rise another 30% this year as long as OPEC’s oil price agreement stays in place.
That means savvy oil investors can ride the resurgence of American oil to double-digit profits this year.
While OPEC members are required to cut oil production, American producers are free to produce as much as they like.
OPEC originally agreed to cut production to boost oil prices because its members rely on oil exports to fund their governments.
collected by :John Locas