Published: Thu, June 22, 2017
Money | By Armando Alvarado

Zanganeh Says Higher US Output Impairs Int'l Crude Prices

Zanganeh Says Higher US Output Impairs Int'l Crude Prices

The committee, composed of ministers from Kuwait, Russia, Venezuela, Algeria and Oman, is empowered to recommend further cuts or any other adjustments to the deal, as it sees fit, officials have said.

The US' "oil production increase over the recent months is the main reason for the global oil price fall", Zanganeh said.

August Brent crude futures were down 12 cents at $45.85 a barrel, after falling almost 2% in the previous session to their lowest settlement since November.

Stay long the August 2017 WTI futures contracts.

"The cause of the fall in oil prices is the unforeseen increase in USA oil production", Zanganeh told reporters on the sideline of a cabinet session in Tehran on Wednesday. Analysts say any rise in crude prices would be short-lived as higher prices will prompt United States drillers to bring more rigs back online.

Number of global displaced up to 65.6 million last year
Last year, more people than ever were refugees or forcibly displaced from their home because of war, violence or persecution . There were slightly less internally displaced people in 2016, around 40.3 million, compared to 2015, which had 40.8 million.

The decrease in oil price came while OPEC's compliance with the deal is about 106 percent, though Libya and Nigeria, which are exempt from the oil cut deal, increased output by 350,000 b/d in May, and their production is increasing now. The increase in American output is more than the Organization of Petroleum Exporting Countries expected and is contributing to crude's decline, he said.

So far this year, oil has lost 20% in value, its worst performance for the first six months of the year since 1997.

OPEC in a meeting in May agreed to extend until March 2018 an oil output cut deal that was sealed a year ago to help shore up prices.

"We are consulting with OPEC member states to have them prepared to make a decision, " Zanganeh said.

"Any decision would be hard to take, because there is no any other way but decreasing OPEC production again". OPEC compliance with the curbs was 108% non-OPEC compliance was 100% in May, according to a source familiar with the matter, Reuters reported Tuesday.

Like this: