Further support oil prices? Saudi Arabia will reduce supply to Asia next month

In addition to releasing the cut signal, Saudi Arabia may also take practical action to further support oil prices.

In June this year, Saudi Aramco sold to Asia, crude oil will be reduced by about 700 million barrels, of which the supply of Southeast Asia, China and South Korea will be reduced by 100 million barrels, to India and the United States and India, Japan’s reduced supply will be slightly higher than 300 million barrels and slightly less than 100 million barrels.

Reuters reported that even if the OPEC has been discussed in the cut-off agreement extended to the possibility of this year, the above measures to reduce exports is not necessarily representative of Saudi Arabia plans to increase production scale in the second half of this year.

Wall Street has learned that more and more signs that OPEC will decide to extend the cut agreement at this month’s meeting. On Thursday, OPEC representatives said OPEC and non-OPEC producers could extend the cut-off agreement to June this year, but the size of the cut is unlikely to expand. On Monday, Saudi Energy Minister Khalid Al-Falih said it would “take all possible means” to end the excess supply of crude oil. OPEC’s cut-off agreement may continue into the second half, or even to 2018. However, the media said, OPEC on behalf of the internal and no further reduction of production to reach an agreement. The market has not only lost patience with OPEC cuts, but has also ignored Philly’s remarks. On Thursday, oil prices fell 5 percent to a five-month low, and this Friday’s speech was slightly boosting crude oil prices; however, after China’s crude oil imports were released, WTI crude fell below $ 46.0 a barrel.

On Tuesday, international oil prices fell, cloth oil fell about 0.4% drop 50 US dollars / barrel, US oil fell more than 0.2%, 47 US dollars / barrel below.

Last year in December, OPEC and Russia and other non-OPEC oil-producing countries reached a six-month joint reduction agreement, the agreed average annual reduction of about 180 million barrels. Saudi Arabia’s commitment to reduce production accounts for about 40% of OPEC commitment to cut production, the current average daily reduction of more than 50 million barrels, the average daily production of less than 10 million barrels.

Last month, Reuters news sources said the increase in domestic demand this summer will make Saudi Arabia under pressure, in compliance with the cut agreement, it is difficult to maintain about 10 million barrels of daily output.

Wall Street knowledge mentioned earlier, OPEC market share has been eroded by the United States, thus reducing the OPEC further reduction of the will. Now OPEC into a dilemma: cut the final result of oil prices rise, but the benefit is a competitor.