Rising oil prices feeding into increase in headline inflation - Saxo Bank

Oil prices fall as supply from top three producers set to rise

Oil prices fall as supply from top three producers set to rise

"Even with increases in OPEC production, Europe still needs more light crude to stay supported".

There is therefore no doubt that Zimbabwe with a new administration working so hard to improve the country's economic fortunes, is being negatively impacted by this 50 percent price hike of oil in the past six months.

Saudi Arabia and Russia's potential policy shift doesn't materially change Goldman Sachs Group Inc.'s bullish oil outlook, the bank's analysts including Damien Courvalin said, reiterating the bank's forecast of Brent at $82.50 per barrel in the third quarter.

Data from industry group American Petroleum Institute (API) showed that USA crude inventories rose unexpectedly last week, increasing by 1 million barrels against analyst expectations of a 525,000-barrel decline.

In Brazil, the FUP oil workers union said workers had joined the call for a nationwide strike on at least 20 oil rigs in the lucrative Campos basin and other areas of the country.

Prices of daily-use consumer products such as packaged snacks, detergents and cooking oils may increase by 4-7% after petrol and diesel prices rose to a record, companies said, anxious that the inflationary trend could adversely affect demand.

Since past year, oil producing countries have cut back production in an attempt to offset dipping prices, withholding as much as 1.8 million barrels per day.

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According to Reuters, the discussions were triggered by complaints from US President Donald Trump that the oil price has soared too high and was being propped by artificially by OPEC, after Brent Crude hit its highest level since late 2014 at $80.50 this month.

"Structurally there shouldn't be enough pressure on the market to take us back into that very high-priced world", said Andrew Slaughter, an energy expert and executive director at consulting firm Deloitte Services LP. The extent to which this may cause a supply shortage due to lack of investment remains to be seen, but at present, with lower cost bases and potentially increased revenue from higher oil prices, equity holders in the sector have good reason to remain optimistic about the recovery in the near-term.

Energy ministers from Saudi Arabia, the United Arab Emirates and Kuwait plan to meet on Saturday to discuss OPEC matters, according to people with direct knowledge of the matter. But he said an agreement of a gradual easing was the likely outcome.

Both Saudi Arabia and Russian Federation have started discussing the possibility of unwinding the production cut agreement, which could ease prices.

This past week, however, it was not crude oil and products that provided the gains. The countries are said to have concluded that the market re-balanced in April.

The shale revolution that started with the development of new technologies in oil extraction boosted US oil production by 80 percent since 2012. The current global rig count now stands above the average set in 2017. For the time being, the upward trend of oil prices is exhausted primarily owing to news flow, he adds.

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