Oil-Related Developments - July 2017

A weekly report by the Energy Information Administration (EIA) on 21 June said crude inventories had fallen 2.5 million barrels and gasoline stockpiles slipped 0.6 million barrels. But, it also noted that petroleum in storage was still plentiful and that gasoline was above the upper limit of the average range for this time of year. Following this report, the price of the benchmark WTI crude fell to $42.34 a barrel, down 2.69 percent, far below its price of $54.45 a barrel in February. The Brent benchmark slid to $44.85 a barrel, down 2.54 percent.

There are several reasons why prices have not responded more to the OPEC-non-OPEC production cuts: a more than doubling in the number of drilling rigs and increases in shale-drilling efficiency have boosted U.S. crude oil production to more than 9.3 million barrels a day, up about 850,000 barrels a day in September last year. Again, Nigeria and Libya, both experiencing internal political strife and exempt from OPEC quotas, have boosted production, offsetting other OPEC cuts and raising OPEC’s total output. Moreover, Iraq is said to be cheating on its quotas, and Russia, while reporting lower production, is exporting more oil than ever.

 

July 3, 2017

E-mail me when people leave their comments –

You need to be a member of Ananta Centre to add comments!

Join Ananta Centre

About the Author

Ambassador Talmiz Ahmed

Former Ambassador of India to Saudia Arabia, Oman and UAE, monitors developments in the West Asian region.  

Ambassador Talmiz Ahmad joined the Indian Foreign Service in 1974. Early in his career, he was posted in a number of West Asian countries such as Kuwait, Iraq and Yemen and later, between 1987 and 1990, he was Consul General in Jeddah. He also held positions in the Indian missions in New York, London and Pretoria. He served as Indian Ambassador to Saudi Arabia (2000-03; 2010-11); Oman (2003-04), and the UAE (2007-10). He was also Additional Secretary for International Cooperation in the Ministry of Petroleum and Natural Gas in 2004-06. In July 2011, the Saudi Government conferred on him the King Abdul Aziz Medal First Class for his contribution to the promotion of Indo – Saudi relations. After retirement from the Foreign Service in 2011, he worked in the corporate sector in Dubai for three years. He is now a full-time academic and holds the Ram Sathe Chair for International Studies, Symbiosis International University. He has published three books: Reform in the Arab World: External Influences and Regional Debates (2005), Children of Abraham at War: the Clash of Messianic Militarisms (2010), and The Islamist Challenge in West Asia: Doctrinal and Political Competitions after the Arab Spring (2013). He writes and lectures frequently on Political Islam, the politics and economics of West Asia and the Indian Ocean and energy security issues.