Today, oil rallied upon comments by the Saudi Arabia's energy Minister, Khalid Al Falih. According Dow Jones, Mr. Khalid said the country would act to help re-balance the market if needed. Currently are above $45 per barrel.
Saudi Arabia, which is the largest oil producer in the 14-member Organisation of Petroleum Exporting Countries (OPEC), pumps out more oil during summer to meet her seasonal power increase and domestic demands. On Wednesday, Saudi Arabia said that output increased by 123,000 barrels per day, which pushed overall production for July to 10.67 million barrels a day. This surpasses the previous record of 10.56 million per day from June 2015. It also reported that budget deficit for 2015 hit $98 billion.
Saudi Arabia Energy Minister, Mr Khalid Al Falih said "despite the bearish sentiment engulfing the market, we still see strong demand for our crude in most parts of the world, especially as supply outside of OPEC has been declining fast, supply outages increasing and global demand still showing signs of strength" Some oil analysts said Saudi Arabia just wants to maintain her export market share where it sees growing competitions from rivals.
Meanwhile there are disruptions in oil supply in Nigeria and Libya due to attacks on oil facilities by Militants in recent times, which has affected supply. Oil prices are still under pressure. The supply of oil in the world market far exceeds demand. Prices have been falling from triple digit levels of summer 2014 and threatened to fall below $25 per barrel this earlier this year. Despite this disruptions, analysts warned that when these conflicts are over, supply will jump which could make the market bearish.
OPEC members are schedule to meet informally in Sept in Algiers. The meetings held in April and June failed because they could not come to agreement.
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