Saudi's Rule Out Production Cuts, Oil Drops 4%
Oil prices fell 4 percent on Tuesday after Saudi Oil Minister Ali Al-Naimi ruled out any production cuts, restating the kingdom's rationale for maintaining output was that demand would pick up excess crude that has crushed prices over the past 20 months. Big oil exporters Saudi Arabia and Russia have proposed to freeze output at January levels, which were near record highs, only if other producers also do the same. More meetings on the potential freezes will be held in March, al-Naimi told the IHS CERAweek conference in Houston, adding that he expects most of the countries that count to freeze crude production levels. Analysts remain skeptical that the cuts will be effective in rebalancing the market.
Crude Tanker Backlog in US Gulf Eases on Robust Imports
A backlog of tankers off the shores of the U.S. Gulf Coast that swelled in the final quarter of 2015 is easing, with the volume of crude waiting to discharge declining by more than half in just a month's time. There currently are 27 vessels offshore in the U.S. Gulf Coast waiting to discharge an estimated 15 million barrels of crude, compared to 36 million barrels at the start of December, ClipperData said on Tuesday. There are typically 10 million to 12 million barrels of oil waiting to discharge at any one time, Clipper said. The decline comes as December crude imports are on track to hit their highest weekly average since September 2013, so far averaging roughly 7.9 million barrels per day, according to data from the Energy Information Administration.
