Market Research News

Oil Prices Rise by Almost 2% as Venezuela Reaches Deal

  • September 19, 2016
  • By Rajesh Namase
  • 0

Oil prices rise by almost 2% as Venezuela announces potential deal between non-OPEC and OPEC producers.  According to Venezuelan President Nicolas Maduro, September could see the announcement of a deal on output. This deal would moderate the output of crude oil and help to stabilize prices. Oil prices have been reducing significantly over the [past two years due to oversupply through a glut in production.

At 0645 GMT (0245 Eastern) Brent crude futures were at $46.54 a barrel, up 1.7% from the previous settlement, and U.S. crude at $43.81 a barrel, up 1.8%. This increase was due partially to the Venezuelan announcement and partially to other circumstances.

Oil Prices Rise

Clashes in Libya Moderate Increase in Oil Output

These included clashes in Libya that threatened to delay the country’s efforts to recommence crude exports. The clashes have disrupted the loading of crude oil at Ras Lanuf for the first time in two years. This is an indication of the difficulties the country may experience in getting its oil industry back on track. Concerns about Libyan supply had contributed to depressed oil prices. The world does not need any more crude supply adding to the current glut.

In August, OPEC producer Iran increased its crude exports by 15% over July’s production. This took the country’s production to over 2 million barrels a day. This is not far off Iran’s production figure of five years ago, prior to sanctions being applied.

Oil Prices Rise in Spite of USA Rig Count Increasing

The oil rig count in the USA is also increasing. Rigs have been added for 11 of the past 12 weeks, with two more added in September. The total number of oil rigs in the USA is now 416 – the highest number since February.

All of this adds to crude stocks and a pessimistic outlook on oil prices. A deal between OPEC and non-OPEC countries might bring some sanity into the oil production industry.

About Rajesh Namase

Rajesh Namase is a technology enthusiast, online marketer and SEO. He specializes in online marketing (SEO, SEM, Social Media, Content Markting, Email Marketing). Apart from that, he loves to blog about technology on TechLila.