Oil prices fell after OPEC complied with the production cut agreement

Asian crude oil futures fell on Tuesday morning after a survey showed that OPEC’s compliance with the cut-off agreement was low in June, while market participants continued to focus on continuing geopolitical tensions in the Middle East, according to Prussian Energy Information on July 9.


At 11:05 a.m. Singapore time (03:05 GMT), the September Brent crude oil futures on the Intercontinental Exchange (ICE) fell 24 cents (0.37%) from Monday’s closing price of $63.87 a barrel, and the August light low-sulfur crude oil futures contract on the New York Mercantile Exchange fell 20 cents (0.35%) to $57.46 a barrel.

According to a survey by S&P Global Platts Surve, OPEC’s compliance with its production quotas fell sharply in June as Saudi Arabia and Nigeria’s output increased this month and Iraq continued to ignore its oil production cap, leading the organization to cut its profit margins within the scope of supply agreements. Drop.

The survey found that OPEC’s overall daily output was 30.9 million barrels, unchanged from May. Although most of this month’s decline came from Iran and Libya, it was offset by surges in Saudi Arabia and Nigeria, resulting in a decline in production compliance.

Last week, OPEC and 10 non-OPEC allies, led by Russia, extended their 1.2 million barrels/day cut agreement to March 2020 to boost oil prices.

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UOB Bank said in a report Tuesday: “Prices of crude oil are limited until the major energy reports are released.”

OPEC’s monthly oil market report is scheduled to be released on Thursday, while the International Energy Agency will release its monthly oil report on Friday.

Meanwhile, analysts say the ongoing tensions in the Middle East continue to attract market attention.

According to shipping sources, a British flag tanker operated by BP cancelled a crude oil shipment after tensions between Britain and Iran escalated.

Last week, Shell chartered a Suezmax tanker called “British Heritage” and loaded 140,000 tons of crude oil in Basra for shipment to Northwest Europe or the Mediterranean. However, industry sources said Monday that the shipment has now been cancelled.

Last week, the Gibraltar government said it had seized the supertanker Grace 1, which allegedly transported crude oil from Iran to Syria in violation of EU sanctions. After the incident, a senior Iranian official said Iran should arrest a British tanker as a warning.

“As the risk of tanker attacks increases, oil transportation is being diverted or delayed,” analysts at the Australian New Zealand Bank said in a report Tuesday. Investors are concerned about the disruption of production in the region, and this risk premium is reflected in prices.

In addition, Pratts analysts estimate that U.S. crude oil stocks have fallen by 4.2 million barrels to 464.3 million barrels in the week ending July 5.

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Last week, total distillate inventories increased by 1.4 million barrels to 128.2 million barrels, while U.S. gasoline inventories decreased by 1.2 million barrels to 229.4 million barrels.

The American Petroleum Association will release preliminary data on last week’s U.S. inventory levels later Tuesday, while the U.S. Energy Information Agency will release clearer data later Wednesday.