Despite Warning by OPEC to Members to stick to quotas, Oil rises

The Saudi Arabian energy minister said it would hurt those who bet on oil prices "like hell."
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Organization of the Petroleum Exporting Countries (OPEC)

Oil prices rose on Friday for the fourth day in a row, setting crude track for a weekly rise of about 10 per cent, after Saudi Arabia forced allies to adhere to production quotas and banks, including Goldman Sachs, expected a supply deficit.

Brent crude rose by 0756 GMT to 18 cents at $43.48 a barrel, while U.S. oil futures rose to $41.14 by 17cents.

Both contracts are set for their biggest weekly gains since early June after U.S. supply was reduced by Hurricane Sally, while OPEC and its allies set out measures to fix the market weakness.

Goldman Sachs estimated that by the fourth quarter, the market will have a deficit of three million barrels per day (BPD) and reiterated its target for Brent to hit $49 by the end of the year and $65 by the third quarter of 2021.

Swiss bank UBS also pointed to the likelihood of undersupply in the oil market, predicting that Brent will rise in the fourth quarter to $45 a barrel and by mid-2021 to $55.

Meanwhile, in the next few days, a tropical storm could become a hurricane in the western part of the Gulf of Mexico, possibly threatening further U.S. oil facilities.

The Saudi Arabian energy minister said it would hurt those who bet on oil prices "like hell."

The Organization of the Petroleum Exporting Countries (OPEC) and other producers in OPEC+ are cutting production by 7.7 million bpd and the group stressed at a Thursday meeting that it will take action against members not complying with the agreement.

“We think OPEC+ will put on hold plans to taper the cut down to 5.8 million bpd … when the entire group convenes again in December,’’ RBC analysts said.

U.S. offshore drillers and exporters started a clear-up in the Gulf of Mexico on Thursday after Hurricane Sally weakened to a depression and rebooted idle rigs for five days after their closure.

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