Saudi Arabia is considering a 1 million barrel-a-day cut WASHINGTON (Alliance News) - Crude oil futures continued to rally Tuesday amid reports that Saudi Arabia will sharply cut oil production in the face of defiance from fellow OPEC members.
Saudi Arabia is considering a 1 million barrel-a-day cut to its crude exports, according to a report from the Financial Times. That's after Ecuador said will no longer comply with an agreed OPEC production cut due to the country's financial difficulties.
"There's a need for funds for the fiscal treasury, hence we've taken the decision to gradually increase output," Ecuador Oil Minister Carlos Perez said. "What Ecuador does or doesn't do has no major impact on OPEC output."
Although Ecuador's meager production is unlikely to make a huge difference in the global market, other struggling OPEC members may follow suit.
August WTI oil settled at USD46.40/bbl, up 38 cents, or 0.8%, as prices rallied despite predictions that US output will remain robust. A weak US dollar also boosted commodities.
Shale crude-oil production from seven major US oil plays is expected to climb in August, according to monthly report from the Energy Information Administration released Monday.
Shale output is seen rising by 113,000 barrels a day to 5.585 million barrels.
Traders will be paying close attention to US inventories data. The American Petroleum Institute offers its stockpiles report this afternoon, followed tomorrow morning by the Energy Information Administration."
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