News // Russia
Oil prices retreat on Russian concerns about balance
20 October 2017 , 10:11Neftegaz.RU776
A downbeat sentiment from a Russian oil boss on the trajectory for crude oil prices sent key benchmarks diving into negative territory on early Thursday, October 19, 2017.
Outside of the 1st week in October, crude oil prices have been holding steady in bullish territory for the better part of the 3rd quarter.
The rally is due in part to the effort by the OPEC to balance the market through coordinated production cuts, an effort that includes a handful of non-member producers like Russia.
The International Energy Agency said in its monthly market report for October that, for 2018, 3 out of the 4 quarters will show a market more or less in balance, assuming OPEC output stays the same and there are no major unforeseen disruptions.
«The balance is fragile and unstable so far», he was quoted by Tass. «I think therefore that we should not expect a surge in oil prices in near future.»
The difference or spread, between Brent and WTI is making U.S. crude oil competitive on the open market.
US exports are near record territory, though US oil has only been moving freely since 2015, when former President Obama lifted a 40-year-old ban on exports.
A report of the RBC Capital said more US oil exports could be supportive of crude oil prices.
«We have long expected the WTI discount to Brent to remain wide until the market arrives at the juncture where inventories outside the US normalize and the call on US crude exports increases to plug global supply gaps,» the report read.
«This is an incrementally bullish signal worth watching.»
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