Sunday, 9 December 2018
Latest news
Main » Putin says Russian Federation 'satisfied' with oil at $60

Putin says Russian Federation 'satisfied' with oil at $60

01 December 2018
Putin says Russian Federation 'satisfied' with oil at $60

Given all those political calculations, Kloza and other energy analysts say that Saudi Arabia is likely to cut production modestly and lobby other producers to do the same.

However, one of the most important determinants of oil prices is OPEC. Meanwhile, the specter of expanding US crude stockpiles has also been haunting the market. Now the market is being flooded with oil supply.

The kingdom probably needs to keep several hundred billion dollars' worth of reserve assets on hand to maintain confidence in its fixed exchange-rate peg to the USA dollar and prevent a run on the currency.

Oil, which is trading at around $50 a barrel, is close to an economic sweet spot. "It will be interesting to see if Saudi-Russia can keep the floor in place".

"Of course I'm concerned because the price of oil is dropping like insane right now", said Darlene S. Wallace, president of Columbus Oil, a small Oklahoma producer. Production remained at a record 11.7 million barrels per day (bpd).

But oil is a volatile market.

Riyadh has powerful reasons to stop this joke becoming reality.

However, the Russian support this time isn't forthcoming.

But in one respect the situation is even more uncomfortable because Saudi Arabia's official foreign reserves are down to just over $500 billion, from nearly $750 billion in June 2014.

There may be limits to the pressure that Trump can put on MBS, who remains his most important ally in the Persian Gulf. This increase in the country's oil inventory was fed by increasing oil imports. The price even broke the $50.00 support area and traded as low as $49.49. Alberta is working to buy rail cars to help ship more crude as pipeline bottlenecks have the oil-rich province grappling with historic low prices.

OPEC and its allies will be meeting amid concerns over a slowing global economy and rising oil supplies from the United States, which is not involved in the existing pact.

That would bring Riyadh to its second problem: Russian Federation, a long-time foe turned ally over the last two years. Putin has reflected his comfort at oil prices hovering around $60 per barrel.

"Thank you to Saudi Arabia, but let's go lower!"

"We are now in contact with OPEC and if needed, we will continue this joint work", Putin said at an investment forum on Wednesday.

On Friday, Russian Energy Minister Alexander Novak reiterated Putin's view: $60/bbl is just fine for Moscow.

If OPEC decides to increase production, prices can fall.

The consensus is that the Saudis have few good options. If a meeting of presidents Donald Trump and Xi Jinping project a conciliatory tone and raised hopes of de-escalation, a pick-up for risk appetite could lead to higher crude oil prices compared to stocks.