Global Oil Prices Rise. Five Things To Know
1. The Organization of the Petroleum Exporting Countries (OPEC), a producer cartel de-facto led by top exporter Saudi Arabia, is meeting together with some non-OPEC members including top producer Russia at its headquarters in the Austrian capital to discuss output policy.
2. The group started withholding supply in 2017 to prop up prices. Amid strong demand, the market has since tightened significantly, pushing up crude prices and triggering calls by consumers to increase supplies.
3. Saudi Arabia and Russia are in favour of raising output. Other OPEC-members, including Iran, have opposed this, resulting in a flurry of backdoor diplomacy ahead of the meeting, which starts on Friday.
4. The other big uncertainty in markets is potential Chinese tariffs on U.S. crude imports that Beijing may impose in an escalating trade dispute between the United States on one side and China, the European Union and India on the other.
5. Should the 25 percent duty on U.S. crude imports be implemented by Beijing, American oil would become uncompetitive in China, forcing it to seek buyers elsewhere.
"If China's import demand dries up, more than 300,000 barrels per day of U.S. crude will have to find a new destination," energy consultancy FGE said, adding that "this will certainly depress U.S. Gulf Coast prices".