Oil Price Rises To $57 …As OPEC Plans Output Cuts

Brent crude futures rose to 56.20 dollars a barrel by 12:19 p.m. EDT (1619 GMT), while U.S. West Texas Intermediate (WTI) crude futures gained 91 cents, or 1.8 per cent to 50.39 dollars.

Recep Tayyip Erdogan, the president of Turkey, threatened to cut off the pipeline that carries crude from northern Iraq to foreign markets as part of his opposition to an independence referendum in Kurdistan. "The moment we close the tap, then it's done", he added, though he stopped short of saying he would go ahead and block the roughly 550,000 barrels a day of landlocked Kurdish oil that flows to his country's Mediterranean port of Ceyhan.

Strong oil demand growth in emerging economies led by China and India, but also from Europe, is drawing down oil stockpiles faster than expected, putting the global market firmly on track to rebalance, senior industry executives said on Tuesday.

The current price action suggests that the argument for a bear market is being blown up by the aggressive buying.

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Oil prices jumped to their highest for more than two years on Monday after major producers said output cuts were squeezing supplies.

WTI Crude Oil (Nymex) for November rose 3.08 percent to settle at $52.22 a barrel.

"OPEC has now decided they will "wait and see" what happens between now and their March meeting".

However, analysts are skeptical about further price gains due to higher oil output from the United States. On Friday it said the reduction had helped to lift oil prices by about 15% in the past three months.

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Crude oil, Nigeria's biggest revenue earner yesterday hit $58 per barrel, the highest price in 2017, surging the country's excess crude earnings by $22.1 million in one day. When oil prices fell with the recovery in Nigerian and Libyan production during the second quarter, shale operators cut capital expenditure and output started to fall. "I think (Nigeria's oil - TASS) minister will make it public himself", he said.

The state-owned company calculates weekly fuel prices based on a weighted oil price formula made up of 70 percent Dubai crude and 30 percent Brent crude and adjusts fuel prices upward or downward on a weekly basis, depending on the price of worldwide crude.

In May, OPEC and non-OPEC members led by Russian Federation agreed to extend production cuts of 1.8 million barrels per day for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.

Kirkuk, controlled by the Kurdish forces, produces close to 400,000 barrels a day, which makes up nearly 10 percent of total Iraqi oil production. "If OPEC doesn't extend the supply curbs, the market will return to oversupply again, forecasts from the International Energy Agency indicate", according to Phil's Stock World.

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Kachikwu stated at the OPEC and non-OPEC meeting that even though Nigeria's oil production in August was 1.802 million barrels per day (mbpd), it was still not an enough justification for such call.


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