Crude oil prices are under pressures as the Organization of the Petroleum Exporting Countries (OPEC) and NON-OPEC start laying the groundwork for a production increase and traders take profits ahead of the long holiday weekend.
Reuters is reporting that Russian Energy Minister Alexander Novak has had talks with Saudi Energy Minister Khalid al-Falih on an easing of the terms of the global oil supply pact that has been in place for 17 months, Novak said on Friday. The energy ministers of Saudi Arabia, Russia and the United Arab Emirates are discussing an output increase of about 1 million barrels per day (bpd), sources told Reuters. Speaking in St. Petersburg, Falih told Reuters that “all options are on the table” when asked about the targets on production cuts.
Yet, while OPEC is mulling an increase the reality is it will be needed to replace the loss of Venezuelan crude oil and the loss of Iranian crude due to U.S. sanctions. The reality is that a slight increase will ease some short-term concerns this summer, but we will still be undersupplied later in the year with less spare production capacity.
Gasoline demand this weekend should come in at or near records, The U.S. economy is soaring and consumer incomes are at the highest levels in years. A lot of that will go into their gas tank.
Take some time this weekend to honor those who gave everything to defend our freedoms. God Bless them.