Oil prices rise amid Venezuela export concerns

Crude Oil

China's May crude oil imports eased away from a record high hit the previous month, customs data showed on Friday, with state-run refineries entering planned maintenance.

In similar fashion, the metal for delivery in July contracts was trading higher by Rs 32, or 0.73 per cent to Rs 4,387 per barrel in 272 lots.

Iran's OPEC governor, Hossein Kazempour Ardebili, was responding to news that the USA government had unofficially asked Saudi Arabia and some other OPEC producers to raise output.

Industry data from the American Petroleum Institute showed on Tuesday that US crude inventories fell by 2 million barrels last week, compared with analysts' expectations for a draw of 1.8 million barrels.

The surge in US production has pulled down WTI into a discount versus Brent of more than $11 a barrel, its steepest since 2015.

The group and Russian Federation are due to meet at its headquarters in Vienna on June 22 to discuss production policy."The June 22 OPEC meeting will now likely become the most important factor influencing (the) crude price", Jefferies said. USA light crude was down 15 cents at $65.37.

A market that was in panic due to the loss of Venezuelan output and US President Donald Trump's withdrawal from the JCPOA Iran nuclear deal has just concluded that there is no supply shortage and the shale wildcatters of the Permian Basin, Marcellus and the Bakken ensure that US output will continue to rise.

"A consensus for higher oil prices and revenues will be the bedrock of every OPEC nation".

This follows news on Tuesday that the US government had unofficially asked Saudi Arabia and some other OPEC producers to raise oil output.

"It's insane and astonishing to see instruction coming from Washington to Saudi to act and replace a shortfall of Iran's export due to their Illegal sanction on Iran and Venezuela", Kazempour said in comments to Reuters.

Saudi Arabia and Russian Federation were already discussing raising OPEC and non-OPEC oil output by around 1 million bpd, sources familiar with the matter said on May 25.

The price of oil has been under pressure given the potential for a trade war escalating over Washington's pursuit of tariffs. "We always have conversations with the USA about the stability of the oil market". The fact that they did not wait for the next Opec-Russian summit in Vienna on June 22 demonstrates the priority Moscow and Riyadh place to their new shift in oil policy. We should see a big 3-million-barrel drop in crude supply, in tonight's API report.

The Iranian official also criticized a reported request that the United States made of Saudi Arabia to help stabilize oil prices in case the sanctions against Iran drives oil prices up.