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 21204 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
SOUQ.com hosts two-day Samsung carnival with incredible offers on Mobiles, Weara...
100 New Ways to Transform Your Home With the New Ikea Catalogue
Perfect Fragrances to Celebrate Eid
A Post-Summer Pigmentation Saviour from MZ SKIN
LG V30 to Elevate Smartphone Camera to New Heights
Next Major Smartphone From LG to Feature First-Ever OLED FullVision Display
COÉGA Sunwear Launches Contemporary Autumn/Winter '17 Conservative Swimwear
Michael Kors Debuts New Bancroft Handbag Collection
International SOS and Control Risks Advise Pilgrims Worldwide Ahead of Hajj 2017
Introducing the Fall 2017 GUESS Accessories Collection Advertising Campaign
The Ritual of Karma
Eid Al Adha with Paule Ka Fall-Winter '17
Six Down, Two to Go - ADSB Keeps Up Pace in Delivering Ships to Kuwait
Patrimony Collection Excellence Platine
Highly Anticipated Audemars Piguet Royal Oak Extra-thin Arrives in the Middle East
ICONIC announces ICONIC KIDS- Born Different
Global Jewellery Retail Chain Joyalukkas signs Award-Winning Bollywood Actress K...
Emily Ratajkowski wears Salvatore Ferragamo eyewear
UAE Team Emirates to Make Vuelta a España Debut
Zenith Chronomaster El Primero Full Open
UAE is likely to see increased cashless transactions by 2020: Xpress Money's Str...
"WATHIQATI" Receives the highest number of documents since its launch ...
New UAE Space Agency Board of Directors Holds First Meeting
SOUQ.com – Your one stop shop for all back to school essentials with up to 60% off
Education in the UAE continues to cost families almost AED 1 million per child n...
The Aston Martin Vanquish Zagatos: Speedster and Shooting Brake join Coupe and V...
Growing appetite for seafood drives demand at Middle East's largest dedicated se...
Al-Futtaim Honda launches Consumer Happiness Counter initiative
Dubai Land Department's ‘Ejari' smart application protects the right of all parties
Abu Dhabi Ports seals strategic partnership with Healthpoint for wellness-coachi...
Turkish Airlines' cross-continental flights are more comfortable now with the ba...
Win prizes worth over AED 2million with Al-Futtaim's retail brands
Kamal Vachani welcomes Rt Hon Keith Vaz MP, UK
Joyalukkas launches Diamond Earring Festival with the latest Happy Diamonds coll...
Jafza attracts 267 new companies during the first half of 2017
3rd Maritime Conference & Expo (MARACAD 2017) launches “Maritime Business Leader...
Get Ready to Go Back-to-School with Dubai Festival City
Dubai Science Park and Al Jalila Foundation sign MoU to support scientific resea...
Second phase of electronic medical record project goes live across several DHA h...
Fiat Chrysler Automobiles to Join BMW Group, Intel and Mobileye in Developing Au...
“Gulf Navigation Holding” marked rapid profit growth in the first half of 2017 by 33%
Schneider Electric and Claroty partner to address safety and cybersecurity chall...
Top Saudi Students Complete Huawei's ICT Program in China
Major Components Successfully Installed at Unit 4 of Barakah Nuclear Energy Plan...
First-of-its-Kind National Health Study to Enlist 20,000 Emiratis
Sharjah calls on entrepreneurs to participate in flagship Sheraa Accelerator program
Sharjah Health Education Department Announces “Health and Tourism 2017”
UAE Student's ‘Genes in Space' Experiment Launches to International Space Station
Selfie Superstar or Sports Fanatic? Head Back to School with the Latest Must-Hav...
UAE Welcomes the Finalists of the Most Popular INFINITI Engineering Academy Edit...