Oil prices dip on fears Middle East rift could harm OPEC cuts
Read original article on Reuters or read some of the key points below;
- Oil prices fell more than 1 percent on Monday on concerns that the cutting of ties with Qatar by top crude exporter Saudi Arabia and other Arab states could hamper a global deal to reduce oil production.
- Saudi Arabia, the United Arab Emirates, Egypt and Bahrain closed transport links with top liquefied natural gas (LNG) and condensate shipper Qatar, accusing it of supporting extremism and undermining regional stability.
- Olivier Jakob, strategist at Petromatrix said, “In terms of oil flows it doesn’t change very much but there is a wider geopolitical impact one needs to consider,” Jakob added, explaining that a breakdown in relations between Qatar and Saudi Arabia could make the OPEC-led agreement on production cuts less effective.
- There are already doubts the effort to curb production by almost 1.8 million bpd is seriously denting exports. While there was a dip in OPEC supplies between February and April, a report on Monday by Thomson Reuters Oil Research said OPEC shipments likely jumped to 25.18 million bpd in May, up over 1 million bpd from April.
- Crude output in the United States, which is not participating in the cuts, has jumped more than 10 percent since mid-2016 to 9.34 million bpd, close to levels of top producers Saudi Arabia and Russia.
