Oil steady as growth in USA supplies faces lower Iran exports

Ivan Schwartz
October 16, 2018

The Schork Report Founder Stephen Schork discusses why low oil prices aren't necessarily good for the economy and how high prices are a reflection of a strong economy.

The meet was held as petrol and diesel prices continued their upward march despite a drop in crude oil prices by 5 to 6 dollars a barrel.

The Kingdom expects its oil production to rise next month from the current 10.7 million barrels per day, Saudi Energy Minister Khalid Al-Falih said.

"We heard it today loud and clear from prime minister (about consumer pain)", Al-Falih said.

This comes as fuel prices continue to rise across the four major metros, burning a hole in common man's pocket. "But right now Iran's oil has reached more than $80 [per barrel], and with half the previous exports we will have the same income as before", Jahagiri said, adding that while some of Iran's oil clients had stopped buying its crude oil, the country had taken on some new buyers.

The prime minister also spoke about the various policy initiatives and developmental measures undertaken by his government in the sector, including liberalisation in gas pricing and marketing, open acreage licensing policy, early monetisation of coal bed methane, incentives for discovery of small fields and seismic survey at a national level.

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Modi noted that the oil market was producer-driven both in terms of quantity and price.

The RBI said in its policy statement: "Global headwinds in the form of escalating trade tensions, volatile and rising oil prices, and tightening of global financial conditions pose substantial risks to the growth and inflation outlook".

Washington said this month it would consider waivers for Iranian oil buyers such as India, although it said they would eventually have to halt imports from Iran, the third biggest oil producer in the Organization of the Petroleum Exporting Countries.

The oil exchange is a mechanism that attempts to sidestep the USA sanctions, which are being reimposed following the US withdrawal from the nuclear deal, by allowing private companies to buy the crude at auction in Tehran and then resell it privately on the open market.

Modi sought greater participation of private companies in the distribution of the gas sector. "He said my cost is very high and if oil price is $40-50 (per barrel), we will start losing money", Vedanta Group Chairman Anil Agarwal, who attended the meeting, said.

Other reports by GizPress

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