Iran and Venezuela are now the two key oil supply concerns globally that supported the oil price rally in recent weeks, before Saudi Arabia and Russian Federation hinted at discussions that they were considering reversing some of the cuts to offset production losses and "ease market and consumer anxiety".
One of the key features of oil markets recently has been the widening discount of US WTI crude versus Brent CL-LCO1=R , which has nearly quadrupled since February to $11.40 per barrel, its steepest discount since 2015. The global benchmark crude was US$9.90 above WTI for the same month.
While Saudi Arabia and Russian Federation have signaled they're ready to raise production, Iraqi Oil Minister Jabbar al-Luaibi told Reuters an output boost isn't on the table when the group gathers in Vienna on June 22. US light crude was down 15 cents at $65.37. "$80 is a temporary ceiling for oil until we hear from OPEC".
USA drillers added one oil rig in the week to June 8, bringing the total count to 862, the highest level since March 2015, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday. Gains grew when Algeria's oil minister indicated OPEC would focus on balancing the market rather than on rolling back production caps.
According to the EIA, US crude inventory saw a build of 2.072 million barrels to 436.584 million barrels for the week ended June 1. Treasury Secretary Steve Mnuchin told reporters last month the us held discussions with "various parties" to pump more to offset a drop in Iranian exports due to renewed USA sanctions.
The American Petroleum Institute reported Tuesday that crude stockpiles fell by 2 million barrels in the week ending June 1.
"This seems to be an intervention in OPEC's supply policy ..."
Outside OPEC, however, there were ongoing signs of rising output.