Published: Tue, June 11, 2019
Markets | By Otis Pena

Falih: Saudi Aramco extends offer to buy stake in Arctic LNG 2

Falih: Saudi Aramco extends offer to buy stake in Arctic LNG 2

Last week, USA crude oil July futures rose 0.9% and closed at $53.99 per barrel on June 7.

U.S. West Texas Intermediate (WTI) crude futures were at $53.42 per barrel, 16 cents, or 0.3%, above their last settlement.

Saudi Energy Minister Khalid al-Falih, who was in Moscow for talks with his Russian counterpart, said on June 10 that Russia was the only oil exporter still undecided on the need to extend the output deal agreed by top producers.

Oil prices climbed 35% in the first four months of the year as OPEC reined in output while countries from Iran to Venezuela suffered involuntary cutbacks in supply.

There is a risk that oil prices could drop to as low as $30 a barrel because OPEC and its Russia-led allies could produce more oil by the end of the year than market demand, said Russia's Energy Minister Alexander Novak. USA tariff threats on two countries might have a severe impact on the global growth and hamper the demand prospects for Crude.

Igor Sechin, chief executive of Rosneft, warned against extending the deal, saying it posed a strategic threat to Moscow by allowing the USA to take Russia's market share.

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Harry Tchilinguirian, global oil strategist at BNP Paribas, told the Reuters Global Oil Forum that the United States and China accounted for around three-quarters of annual global oil demand growth in 2018.

Supply has also been limited by USA sanctions on oil exports from Venezuela and Iran.

Despite Monday's increases, traders said concerns about the health of the global economy and its impact on fuel demand still weighed on oil market sentiment.

Energy consultancy FGE said global crude oil demand growth could drop below 1 million barrels per day (bpd) in 2019, down from previous expectations of 1.3 to 1.4 million bpd.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

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