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OIL AND GAS
Gulf nations say reassured by Obama's 'ironclad' pledge
by Staff Writers
Washington (AFP) May 15, 2015


Oil markets relax after Camp David pledges
New York (UPI) May 15, 2015 - Oil prices relaxed further at the start of the Friday session on easing geopolitical concerns and some signs of market equilibrium.

Brent crude oil prices fell about 8 tenths of a percent from the Thursday open to start the day Friday at around $66.30 per barrel, relatively unchanged since the start of May. Brent has held steady above the $60 mark since mid-April as the global market pulls back somewhat from the supply side.

Data this week on gross domestic product growth in the European Union helped stimulate a brief rally, though market data showing a glut in supplies erased much of the gains.

The U.S. Energy Information Administration in a market report for May said it expected Brent crude oil prices would average around $63 per barrel for the second half of the year and $70 for 2016.

At the start of a pan-Arab military offensive in Yemen last month dubbed "Decisive Storm," EIA said that, with more than 3 million barrels of oil passing through Yemeni waters each day, the conflict there presented unique risks to the global economy.

At Camp David, pan-Arab leaders joined U.S. President Barack Obama in uniting under a banner of collective interests in the region, from Yemen to Syria and the Iranian nuclear issue.

"The United States policy to use all elements of power to secure our core interests in the Gulf region, and to deter and confront external aggression against our allies and partners, as we did in the Gulf War, is unequivocal," a statement from the summit read.

On macroeconomic concerns, Gerry Rice, a spokesman for the International Monetary Fund, said during a Thursday press conference negotiators were "working intensely" on addressing Greek concerns undermining some of the confidence in regional economic recovery.

In the United States, weekly data published Friday by oil field services company Baker Hughes show the slump in the exploration and production sector is slowing down. West Texas Intermediate, the U.S. oil benchmark, fell 1 percent to $59.26 per barrel, relatively unchanged from May 1.

Gulf nations were reassured by a pledge from US President Barack Obama that Washington would stand by them despite its overtures to Iran, a senior Arab official said Friday.

"We're very happy the outcome of the results disappointed pundits, and exceeded beyond most expectations," said Abdel Aziz Aluwaisheg, assistant secretary general for the Gulf Cooperation Council.

Obama had "renewed the US commitment to the region, to the Gulf states" during a high-profile summit at his presidential retreat of Camp David in Maryland, Aluwaisheg told reporters.

Obama had gathered top leaders from the six GCC countries -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates -- for Thursday's secluded talks in the leafy woodland retreat.

"The security of the GCC states is vital to the interests of the United States," the Arab diplomat said.

And he insisted "the US is ready now to go even a little bit further," saying that already strong ties had now been elevated to that of a "strategic relationship."

Obama had sought to reassure the majority Sunni Gulf countries wary at Washington's leading role in nuclear negotiations with their regional foe and powerful rival, Shiite Iran.

Obama said the US security commitment to America's decades-old allies was "ironclad."

And he vowed the United States was prepared to help "deter and confront an external threat to any GCC state's territorial integrity."

In a communique issued at the end of the summit, the US and Gulf nations denounced Iran's destabilizing activities in the region.

Gulf nations have been fearful that if a deal is reached with Iran by a June 30 it will only embolden the Shiite country blamed for propping up Syrian President Bashar al-Assad during the four-year civil war and for backing Huthi rebels in Yemen who have forced the president to flee to Riyadh.

They are concerned too that a deal will lead to a widening US rapprochement with Iran -- even though the two countries have not had formal ties for more than three decades.

But Obama also managed to allay these concerns, Aluwaisheg said.

"The deal is about the nuclear program, that's really what the deal is about. There's no grand bargain," he said.

"There is no abandoning of the GCC, there is no pivot to Iran."

And he offered that "if Iran moderates its behavior... then we all will pivot to Iran, but it's in the hands of the Iranian regime."


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