The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
Meanwhile, Market Watch reports that crude oil prices were on a positive course in early Asia trade on Wednesday, driven by hopes that key global producers may agree to a production freeze later this month despite an escalating tussle between Iran and Saudi Arabia over the issue.
Prices rose overnight after Kuwait, a heavyweight in the Organization of the Petroleum Exporting Countries, expressed confidence that players within and outside the bloc will move ahead with the proposal to limit crude output.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in MayCLK6, 2.87% traded at $36.88 a barrel, up $0.94, or 2.6% in the Globex electronic session but around 38% lower from a year ago. June Brent crude LCOM6, 1.95% on London’s ICE Futures exchange rose $0.73, or 1.9%, to $38.59 a barrel, down roughly 42% from the previous year.
Oil prices have been range-bound for months on speculation of a possible production freeze. Some analysts say that even if an agreement is reached at the Doha meeting on April 17, the move is unlikely to make any significant dent given persistent oversupply. Others view it as a step toward rebalancing the market.
However, sentiment fell last week after Saudi Arabia, OPEC’s largest producer and one of the original initiators of the plan, said Friday it would back out unless Iran is on board. Tehran plans to increase output until it reaches pre-sanction levels of around 4 million barrels a day.
“Oil prices are mainly moving on rhetoric by OPEC officials and not fundamental changes. Market watchers will be keeping their ears sharp until the suspense of a possible production freeze is over,” said Barnabas Gan, an OCBC commodities analyst.
BMI Research said an agreement to freeze production “looks increasingly less likely” and expects any price-supportive communique from the meeting to be short-lived.
The weekly U.S. crude inventories and production data are scheduled for release on Wednesday.
Based on a Wall Street Journal survey, U.S. oil inventories are expected to have risen 3.3 million barrels last week. Inventories have been rising for the past seven weeks and are approaching all-time highs.
The American Petroleum Institute, an industry group, said late Tuesday that its own data for the period showed a 4.3-million-barrel drop in crude supplies, a 100,000 barrel decrease in gasoline stocks and a 2.7-million-barrel rise in distillate inventories, according to market participants.
Nymex reformulated gasoline blendstock for May RBK6, 0.43% — the benchmark gasoline contract — rose 101 points to $1.3879 a gallon, while May diesel traded at $1.0900, 154 points higher.
ICE gasoil for April changed hands at $318.25 a metric ton, up $3.75 from Tuesday’s settlement.