Here's the problem: "Middle Eastern crude oil producers could be one the biggest losers from the new regulation, because they pump high-sulfur crude, Amrita Sen, chief oil analyst at Energy Aspects", told CNBC. US stock markets sank more than 1 percent, while the dollar wobbled at a 10-month high against the euro. Only Russia now produces more, at around 11 million bpd. July WTI futures volume already tops 70,000 contracts - more than 420% of the 10-day average for this time of day - a feat even more impressive given that it's a public holiday in both London and NY.
US oil market was closed on Monday for the Memorial Day holiday. Total volume traded was about 109 per cent above the 100-day average.
At 10:30 am Singapore time (0230 GMT), ICE July Brent crude futures fell 39 cents/b (0.52%) from Tuesday's settle to $75/b, while the NYMEX July light sweet crude contract slid 26 cents/b (0.39%) to $66.47/b.
The spread between Brent and WTI stands at about $8.70 a barrel, the widest since March 2015 due to the depressed price of United States crude compared with Brent. And countries like India benefit when crude prices are tamed.
Another study was conducted in 2004 by the U.S. Department of Energy to assist the country in assessing the options and potentials for strategic oil stockpiles as well as give recommendations to enact legislation pertaining to the oil stockpiling program.
The CFTC data suggests that hedge fund managers were busy slashing bullish positons in crude oil well before OPEC and other major non-OPEC producers started hinting last week that they would consider reducing output restrictions. The countries are said to have concluded that the market re-balanced in April.
The oil price fell 2 per cent on Monday from $US76.17 to $US74.49, wiping out much of the gains over the past month. Anything above that level "can lead to certain problems for consumers, which also isn't good for producers", he said.
"We agreed that the current oil market anxiety is a reflection of the geopolitical situation and not a result of any oil supply shortage", Al-Falih said on his Twitter account. With the Organisation of Petroleum Exporting Countries and its partners said to have cleared a market surplus despite record American production, traders now are weighing whether Saudi Arabia and Russian Federation will implement their plan without finding a compromise with allies. The European Union said it would impose additional sanctions on Venezuela after early presidential and regional elections that were "neither free nor fair", according to a statement from the group.