GoDubai
  
  
  
  
Citylife > Press Release
  Home Contact us Add to Favourites
Most Recent Postings
More Press Releses
Featured Sections

Event Finder
A daily roundup of exhibitions, promotions and other events in Dubai and the rest of the Emirates.
Submit an Event
Latest Dubai Press Releases >>

 
  Share

Oil prices on Thursday saw a healthy $1 rise, sparked by the reductions in production by OPEC and non-OPEC producers that came into effect on January 1st.

This shows that investors are getting on board with the commodity, despite the concerns around the American crude oil inventory, which grew from 2.9 million barrels to 488.3 million barrels in just a week, according to the US Energy Information Administration.

Balancing Supply and Demand

OPEC countries agreed to reduce crude oil production as of the start of the year in a bid to fix the oversupply that has been experienced in many parts of the world. Before these measures came into place on New Year's Day, Saudi Arabia was shipping more oil than it had since May 2003 at 8.26 million barrels per day. Even though these were the highest export levels in well over a decade, prices did not fall as importers were anticipating the drop in production, which was announced in November. OPEC's plan was to redress the balance of supply and demand, in order to keep prices from getting out of control. Saudi Arabia's agreement was key to the success of the plan, and Energy Minister Khalid Al Falih offered 'very strong' compliance with the commitment to reduce the amount of oil that is being taken from the ground for the duration of the production decrease.

The Growth in Saudi Inventory

However, while we may be pumping less oil, Saudi Arabia has its own increase in inventory to consider. Where crude oil used to be used for most of our energy needs, including the intensive energy demands made by extreme high temperatures, our reliance has switched more and more to natural gas, especially since the Wasit plant became operational almost a year ago. With less domestic crude oil use, more of our barrels can be exported, and demand is high in many parts of the world such as China. This can potentially mean that despite reducing production to assist in keeping prices in check, Saudi Arabia may not have to substantially decrease exports. Countries who face a surplus in inventory may also try things like refining more of their oil in order to reduce crude oil output.

What Are Oil Prices Doing Now?

Crude oil's price rises towards the end of the week have shown that investors are not put off by the risk associated with growing oil inventories in North America, and that there is some faith that the oversupply problem is being addressed by the OPEC deal. Commodity traders on online platforms like IG certainly seem to be watching crude oil keenly, and during early trading hours on Friday the price was hovering around the $53.44 mark – down from $53.79 at opening on Thursday, however still retaining a lot of the $1.03 it had risen by since the day before.

It is going to be an interesting period for oil, both for the industry in Saudi Arabia and for investors worldwide. Analysts will be watching keenly to see how the OPEC agreement pans out over the coming months.


Posted by : GoDubai Editorial Team
Viewed 15793 times
Posted on : Saturday, March 11, 2017  
Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of GoDubai.com.
Previous Story : Technology and Innovation Key to Leveraging Heavy Oil's Untapped Potential, says Bapco Chief
Next Story : ADNOC Distribution Opens Fifth ADNOC Xpress Station
Email this article Print this article

Share this article with your friends and followers
NewsVine

Comments

Back to Top  
Most Viewed Press Release posted in the last 7 days
Grand Optics exclusive: Le Specs eyewear collection LUXE Nucleus
Grand Optics exclusive: Le Specs Eyewear Collection Escape to the Exotic
Introducing Parfums De La Bastide, an Artisanal Maison de Parfum inspired by Pro...
Grand Optics Exclusive: MARNI eyewear collection
Chaumet - Imperial Splendours, The Art of Jewellery Since the 18th Century
From a House to a Smart Home: LG Smart Technology Helps Make Homes More Comforta...
Gold Collagen® to Launch in Dubai, May 2017
GKhair celebrates 10 years of success at Beautyworld Middle East
Dubai's largest Ramadan Night Market is Back!
Azraq, the world's first refugee camp powered by renewable energy
Aab Modest Wear Launches in the UAE
LG showcases a future of multiple savings with trendsetting smart homes
Lexus Unveils All-New LC luxury Coupe to Open a New Chapter in Brand History
Kiko Milano Launches Tropic Heat - A Collection Full of Energy, Colour and Vibrancy
Doha Bank Wins “Best Regional Commercial Bank” at Banker Awards 2017
Celebrate the Joy of Ramadan with IKEA'S Latest Collection
Brand New Flagship ZIPPY store Opens in Dubai Mall Today
Monsoon and Accessorize have it covered for Ramadan 2017
Travel in style with these summer essentials from ban.do, Ted Baker, Tatty Devin...
Wella Koleston: Get ready for an Eid celebration that shimmers bright with color!
MICHAEL KORS Mens' Accessories
Stunning New Collections from Jaguar and Land Rover
Beautyworld Middle East 2017 opens with 11.5 per cent year-on-year growth featur...
Perfecting the Journey with TUMI 19 Degree Global Campaign
Esposa Privé's Ramadan Collection Lands in Dubai & Abu Dhabi
COÉGA Sunwear Swim Essentials
Rado Features Two Timepieces for the Perfect Father's Day Gift
Celebrate the Warmth of Ramadan With Graceful Shades from Baume & Mercier
Exotic Perfume Worth Over AED 608,000 a Bottle Draws Fragrance Buffs at Beautywo...
EUROSTAR Group expands its beauty and personal care product portfolio
Dubai Chamber announces winners of Dubai Smartpreneur Competition
Bubble 42 Juliette Jourdain - The Girl with the Pearl Bubble
Siemens partners with SACGC to boost industrial technology skills in Kuwait
Volvo Cars partners with Google to build Android into next generation connected cars
Sony Mobile Xperia XZ Premium available for pre-order online and in stores in UAE
Pamper Your Loved Ones This Ramadan With Les Classiques Fragrances, a Timeless C...
Carl F. Bucherer Manero PowerReserve
Growing focus on healthy & balanced meals, festivities, is the new spirit of Ram...
Symrise to Showcase Exclusive Products at BeautyWorld Middle East
British Orchard Nursery Wins 3 Coveted Awards at Dubai's Premier International B...
The world's first SOAPENIR, is the ultimate Ramadan gift for loved ones
The Modern Designs of West Elm's New Summer Collection Unveiled
Nikai introduces the 75 inch Smart LED TV
DeLaCour Crafts a Resplendent Salute to Women with the Passion
Danube Properties Redefines Affordable Housing with ‘Bayz'
SAINT HONORE Charisma Twist
HH Sheikh Ahmed Opens Airport Show 2017 on Robust Growth in Aviation
End your fast in style and true culinary brilliance with Cocoa Kitchen
Ulysse Nardin Marine Regatta
REDTAG Releases Its Limited Edition Ramadan Collection for the Perfect Chic Yet ...