US Becomes Net Oil Exporter For First Time In 75 Years

Alicia Cross
December 7, 2018

"A massive liquidation in long positions by money managers has dampened market confidence on oil prices considerably", said Benjamin Lu of Singaporean brokerage Phillip Futures.

The agreement was reached during the Thursday talks between OPEC members in the Austrian capital of Vienna.

Saudi energy minister Khalid al-Falih, OPEC's de-facto leader, has in recent weeks travelled to Libya and Nigeria to press them on the exemptions, though no public commitments have been announced.

"We're looking for a sufficient cut to balance the market, equally distributed between countries", Falih said.

OPEC has tentatively agreed an oil output reduction but is reportedly waiting for Russian Federation to declare its commitment before deciding the exact volumes for a cut aimed at propping up crude prices.

U.S. President Donald Trump tweeted Wednesday that "Hopefully OPEC will be keeping oil flows as is, not restricted".

Some experts say that gives the US some leverage over the Saudis, though Al-Falih denied that on Thursday.

"Markets.believe the production cut deal will be in range of 1-1.3 million bpd", ANZ bank said on Thursday.

Oil prices fell 1 percent on Wednesday, weighed down by swelling United States inventories and a plunge in global stock markets as China's government warned of increasing economic headwinds.

OPEC, along with its non-OPEC allies led by Russian Federation, earlier this year decided on increasing their respective production levels, in a bid to cap crude oil prices and bring balance to the market.

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In crude oil only, US crude oil exports surged to a record high of 3.203 million bpd last week, as oil production also soars to record highs.

While Saudi Arabia has indicated it is willing to cut production, its decision may be complicated by Trump's decision to not sanction the country over the killing of dissident journalist Jamal Khashoggi. The cartel and its allies are meeting in Vienna this week, trying to make a tough choice to cut output and support prices, risking the loss of more market share to the US.

Qatar minister Saad Sherida Al-Kaabi said he had met several other OPEC ministers, but not his Saudi Arabian colleague.

Members have hinted they plan to cut output by 1.3 million barrels a day, which President Trump fears would cause fuel prices to rise.

"The number that we need is going to be less than 1.3 [million]".

Iran, OPEC's third-biggest producer, complained that it was the first time a USA president was trying to tell OPEC what to do.

The increase alone is equivalent to the output of major OPEC producer United Arab Emirates.

"They should know that OPEC is not part of their secretary of energy", he said.

Zanganeh said the estimated surplus now on the market amounted to 1.3-2.4 million barrels per day.

Negotiations between OPEC members are fraught, as some feel that Saudi Arabia wields too much clout in setting policy.

Other reports by Free-Prsite

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