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Crude Oil Prices - Weekly Outlook: June 18 - 22

Published 17/06/2018, 11:17
© Reuters.  Oil markets brace for OPEC/Russia meeting
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Investing.com - Oil markets will be focused on the Organization of Petroleum Exporting Countries (OPEC) highly-anticipated meeting to see whether major producers plan to increase production.

Oil ministers from OPEC, Russia and other major producing countries will meet in Vienna on Thursday and Friday to review their current production agreement.

Most market analysts expect the oil cartel to consider altering a production deal that has held back 1.8 million barrels per day (bpd) from the market for the past 18 months.

Russia has pushed for returning a million barrels per day back into the market relatively quickly. However, Saudi Arabia would like to try a lower amount to prevent the price from dropping too much, experts said.

However, not all OPEC members agree. Iran, Venezuela and Iraq have all said the current production agreement should stay in place.

Oil prices took a beating Friday, ending the week lower, as traders braced for higher global supplies.

August Brent crude, the global benchmark, tumbled $2.50, or 3.3%, to end at their lowest since May 2 at $73.44 a barrel on the ICE Futures Europe exchange.

They suffered a loss of roughly 4% for the week.

Elsewhere, U.S. benchmark oil, July West Texas Intermediate crude lost $1.83, or 2.7%, to settle at $65.06 a barrel on the New York Mercantile Exchange.

It saw its lowest finish since June 6 and lost about 1% for the week, the fourth weekly decline in a row.

Oil traders will also continue to weigh a steady increase in U.S. production levels in the week ahead as the rise in domestic drilling has been underscoring worries about rising U.S. output.

U.S. drillers added one oil rig last week, bringing the total count to 863, the highest number since March 2015, General Electric (NYSE:GE)'s Baker Hughes energy services firm said in its closely followed report on Friday.

That modest rise marked a fourth straight weekly climb, likely signaling further gains in U.S. output levels.

Domestic oil production - driven by shale extraction - is currently at an all-time high of 10.9 million bpd. Only Russia currently produces more, at around 11 million bpd.

Fresh weekly data on U.S. commercial crude inventories on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise will capture the market's attention.

Ahead of the coming week, Investing.com has compiled a list of the main events likely to affect the oil market.

Tuesday, June 19

The American Petroleum Institute is to publish its weekly report on U.S. oil supplies.

Wednesday, June 20

The U.S. Energy Information Administration will release its weekly report on oil stockpiles.

Friday, June 22

Major global oil producers are due to meet in Vienna in review their current output-cut deal.

Baker Hughes will release weekly data on the U.S. oil rig count.

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