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Tag: OPEC

  • Oil prices hit $57 as OPEC meets

    Oil prices hit $57 as OPEC meets

    Oil prices were largely up yesterday as traders waited to see whether oil- producing countries set to meet in Vienna, Austria would extend production limits to reduce the global crude glut.

    The brent crude was trading at $56.29 dollars a barrel. U.S. crude was 50.64 dollars.

    Ministers from the Organisation of Petroleum Exporting Countries (OPEC), Russia and other producers will meet in Vienna today to consider extending an agreement to reduce output by about 1.8 million barrels per day (bpd).

    Many analysts expected them to extend the current deal that will last till March, but many also said prices at current levels could encourage some countries to boost production.

    The OPEC and non-OPEC nations meeting will discuss a possible extension of an oil supply cut deal to support prices and will consider monitoring exports to assess compliance.

    The organisation aims to clear a global oil supply glut by curbing output by about 1.2 million barrels per day (bpd). Russia and other non-OPEC producers agreed to cut half as much. The pact runs to the end of March.

    Ministers on a panel monitoring the deal, which comprises Kuwait, Venezuela and Algeria, plus non-OPEC producers Russia and Oman, are scheduled to meet at 0800 GMT on Friday in Vienna.

    Oil prices have gained more than 15 percent in the past three months to trade above $56 a barrel, suggesting the deal is making progress in getting rid of excess supply. But oil is still half the level it was in mid-2014.

    Kuwaiti Oil Minister Essam al-Marzouq said on Thursday compliance with output cuts was improving and was above 100 percent. “It is very good, better than last month,” the minister told reporters after arriving in Vienna.

    A technical committee of OPEC and non-OPEC states that met on Wednesday said compliance in August was 116 percent of their pledged oil output cuts, three sources said. That is up from 94 percent in July.

    Algeria’s Energy Minister Mustapha Guitouni said on Wednesday OPEC would discuss extending the deal with non-OPEC producers. He did not comment on arrival in Vienna on Thursday.

  • Oil rises to $56 as Middle East producers stick to cuts

    Oil rises to $56 as Middle East producers stick to cuts

    Oil prices traded close to five-month highs on Tuesday after fresh data showed key Middle Eastern producers continued to cut supply in line with an OPEC-led deal aimed at ending crude glut.

    A weaker U.S. dollar also lent support to greenback-denominated commodities like oil, traders said.

    Benchmark Brent crude futures were up towards a five-month high of 55.99 dollars.

    U.S. West Texas Intermediate ( WTI ) crude futures were up 44 cents at 50.35 dollars per barrel.

    Sentiment has been buoyed since last week when the International Energy Agency lifted its 2017 demand outlook and OPEC estimated the world would need more of its crude next year.

    OPEC’s second-biggest producer Iraq said on Tuesday it had cut output by about 260,000 barrels per day (bpd), exceeding cuts agreed under the OPEC-led pact.

    This comes a day after official export data showed Saudi Arabian July crude exports dropped to the lowest in three years, highlighting its own compliance with output restrictions.

    However, rising crude prices have encouraged drilling in U.S. shale oil regions.

    The U.S. government said on Monday it expected shale output to rise for a 10th straight month in October.

    Traders also closely watched the progress of Hurricane Maria in the Caribbean.

    Although it remains far from the U.S. oil production heartland in the Gulf of Mexico, it could dampen oil demand and disrupt maritime trading routes

  • OPEC Sec-Gen visits Buhari in London

    OPEC Sec-Gen visits Buhari in London

    Organisation of the Petroleum Exporting Countries (OPEC) Secretary General Mohammad Sanusi Barkindo has visited President Muhammadu Buhari in London at the residence of the Nigerian High Commissioner, Abuja House.

    A statement from OPEC said the Secretary General noted that “President Buhari has made a remarkable recovery. He was in pretty good shape, full of humour”.

    The two reviewed oil market conditions and the implementation of the OPEC-non-OPEC ‘Declaration of Cooperation’.

    The President expressed his satisfaction with the steady progress being made by all participating countries in the ‘Declaration of Cooperation’, and urged them to remain focused and resolute.

    He hailed the Secretary General for the landmark decisions taken in both 2016 and 2017, and for the significant turnaround in OPEC since he assumed office in August of last year.

    The President said he has been following events within OPEC and the oil market with keen interest.

    Buhari was once Minister of Petroleum for Nigeria and had represented Nigeria in OPEC for several years.

    Over the past few weeks and months, he has been visited by numerous Nigerian officials.

  • Oil prices dip ahead of OPEC meeting

    Oil prices dip ahead of OPEC meeting

    Oil fell as investors sought reassurance that the world’s largest oil producing countries are complying with their supply-cut deal.

    Futures slid as much as 2.1 per cent in New York.

    Oil in New York was unable to hold its advance above $50 a barrel last week as signs of rising global supply eroded optimism that output curbs by the Organisation of Petroleum Exporting Countries (OPEC) and its partners are rebalancing the market. Compliance with promised production cuts was 86 per cent in July, according to a Bloomberg survey.

    West Texas Intermediate for September delivery fell 37 cents to $49.21 a barrel on the New York Mercantile Exchange.

    Brent for October settlement dropped 27 cents to $52.15 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.77 to October WTI. Russia and Kuwait were said to meet producers such as Iraq in Abu Dhabi to discuss compliance to OPEC production-cut deal. Libya’s production recovery was back on track as operations at its biggest oil field, Sharara, returned to normal after being halted Sunday by armed protesters. Rebounding Libyan supply has hindered efforts by fellow OPEC members to plug a global glut. Worldwide drilling reached its highest in almost two years in July, according to Baker Hughes Inc.

    “The OPEC concerns are certainly going to keep crude from breaking out,” Bart Melek, head of global commodity strategy at TD Securities in Toronto, said by telephone. “Before we see a significant takeoff, we are going to have to see commitment from OPEC that they are in it for as long as is required. They are going to have to come out and make those statements.”

    Saudi Arabia said last month that it planned to increase pressure on nations failing to comply with their pledged cuts. Russia and Kuwait experts started two days of separate meetings with representatives of Iraq, U.A.E., Kazakhstan, Malaysia in Abu Dhabi to discuss countries’ compliance with global crude production cuts, according to people familiar with situation, who asked not to be identified.

    “I don’t think anything will come out of that,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Maybe that is making people a little bearish — because they think something needs to be done about Libya and Nigeria.”

    OPEC’s plan to cut production has “misfired” and the group would have been better with a deeper cut for a shorter period of time, Francisco Blanch, Bank of America Merrill Lynch global head of commodities research, said in a Bloomberg Television interview.

    Libya resuming operations at Sharara “is emblematic of the problems for OPEC and the oil market in terms of just the gross oversupply situation that we remain in,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone. The meetings among producers “will be a negative for the market too if they can’t agree on recommending some further measures.”

  • Output cut to dominate OPEC, non-OPEC meeting

    Output cut to dominate OPEC, non-OPEC meeting

    Oil output cut will dominate discussions at the forthcoming meeting of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers meeting holding in Abu Dhabi next week, following increased violation of compliance with production quota by members.

    The meeting, which will hold between August 7 and 8,will involve  experts to discuss ways to firm up member commitments to uphold their quotas.The OPEC, non-OPEC coalition monitoring committeewill give report on level of compliance with production cuts pledged by members.

    The meeting, according to Platts, is expected to demand better compliance from defaulting members and to hand down warning to such violators and intending violators that the organisation would not tolerate any country that embarks on production overshoot.

    Platts said: “Although conformity with the production agreement remains strong at the aggregate level, some countries continue to lag, which is a concern we must address head on,” Saudi Energy Minister Khalid al-Falih said at a meeting of the monitoring committee in St Petersburg last week.

    Iraq, for example, averaged 69,000 barrels per day (bpd)above its quota from January through June, according to data from the S&P Global Platts OPEC survey, one of six secondary sources used by the coalition to monitor OPEC production. That is the largest amount by which any member of the bloc is exceeding its target.

    Iraqi minister Jabbar al-Luaibi will be meeting with Falih in the coming days, as well as with Iran oil minister Bijan Zanganeh, according to the Iraqi oil ministry.

    “Our friends had some viewpoints and gave some explanations,” Zanganeh was quoted by Iran’s Shana news service as saying.

    “They had justifications for their actions. We will continue talks with them.”

    Luaibi has insisted for months that the deal concerns exports, not production, contrary to the text of the agreement on OPEC’s website, and as the deal was being negotiated last fall, he complained that OPEC’s secondary sources were not accurately reflecting Iraq’s production levels.

    Other countries have likewise complained about secondary sources, but in almost every case, secondary source production estimates have been lower than what OPEC members have directly reported to the secretariat.

    For example, of the nine OPEC members that submitted June production figures to OPEC, six were estimated by secondary sources to have equal or lower production.Of the remaining three, the secondary source estimates for Qatar and Angola were only 10,000 bpd above their directly submitted figures, while Nigeria’s was 70,000 bpd above, though Nigeria is exempt from the deal.

    Overall, the monitoring committee pegged June compliance among the OPEC/non-OPEC producer coalition at 98 per cent.

    The International Energy Agency (IEA), an OPEC secondary source, had compliance among the 12 OPEC members with quotas under the deal at 78 per cent in June and 92 per cent for all of the year.

    Platts reports that it sees compliance much higher, with June coming in at 103 per cent and overall 2017 at 116 per cent.

    No matter the secondary source, however, Saudi Arabia’s over-compliance is what enables the entire coalition to achieve high compliance levels. The kingdom has cut 107,000 bpd more than its required level, according to Platts data, and Falih in St Petersburg said Saudi crude exports would be held to a six-year low in August.

    According to OPEC, the monitoring committee said the meeting will be co-chaired by technical representatives from Kuwait and Russia and also attended by officials from Saudi Arabia. Venezuela, Algeria and Oman, the other members of the OPEC/non-OPEC monitoring committee will not be attending.

    “This is a technical meeting being held to better understand the difficulties and obstacles faced by some OPEC and non-OPEC participating countries and to assess how conformity levels can be improved with the goal of achieving a faster rebalanced global oil market, for the benefit of producers and consumers alike,” the committee said.

    The production cut deal, which went into force January 1, calls on OPEC and 10 major non-OPEC producers to cut a combined 1.8 million bpd.The coalition on May 25 agreed to extend the deal past its June expiry through March, next year.

  • Russia urges OPEC to limit oil output rises from Libya, Nigeria in near future

    Russia urges OPEC to limit oil output rises from Libya, Nigeria in near future

    Russia called on OPEC to limit oil output rises from its members Libya and Nigeria in the near future, as it hosted a meeting of key OPEC states on Monday to discuss ways to prop up oil prices.

    OPEC has agreed with several non-OPEC producers led by Russia to cut oil output by a combined 1.8 million bpd from January 2017 until the end of March.

    OPEC states Libya and Nigeria are exempt and their production has been rising.

    The deal to curb output propelled crude prices above 58 dollarsa barrel in January but they have since slipped back to the 45 dollars to 50 dollars range as the effort to drain global inventories has taken longer than expected.

    Rising output from U.S. shale producers has offset the impact of the output curbs, as has climbing production from Libya and Nigeria, which were granted an exemption from the cuts to allow their industries to recover from years of unrest.

    Russia’s energy minister Alexander Novak said on Sunday that Libya and Nigeria were approaching the moment when their output should be capped due to significant rises in recent months.

    “I think that these countries should join other responsible oil producers and contribute to the market stabilisation initiative as they reach a stable level of output,” Novak told the Financial Times.

    Libya has been producing over one million bpd, below its capacity of 1.4 million to 1.6 million bpd but near its record high since unrest erupted that toppled former leader Muammar Gaddafi in 2011.

    Nigeria has also ramped up output in recent months.

    The two countries have now increased their production by around 700,000 to 800,000 bpd since the OPEC-led pact was agreed.

    OPEC sources told Reuters on Saturday that Nigeria could cap output if it managed to sustain production at 1.8 million bpd for 90 days.

    They also said Libya could struggle to sustain output at above 1 million bpd and hence a cap was not needed.

    Saudi Arabia has signaled that it was prepared to accommodate rising output from Libya and Nigeria, but stressed that additional measures should be taken by all producers.

    Russia said it was willing to further cooperate with OPEC.

    However, the option of deeper output cuts has so far been ruled out, OPEC sources said.

    Non-OPEC member Oman’s oil minister Mohammed al Rumhy told reporters he saw no need for additional production cuts from OPEC and non-OPEC.

    OPEC Secretary-General Mohammad Barkindo said market rebalancing would accelerate as demand would pick up in the second half of the year.

    The oil ministers and officials are attending a meeting in the Russian city of St Petersburg of a ministerial committee that monitors the pact, known as the JMMC.

    The committee meets again in a few months before OPEC’s formal November gathering.

    Russia and Saudi Arabia, both members of the JMMC, face mounting pressure to prop up oil prices.

    Russia, which is heavily reliant on oil revenues, is holding a presidential election next year.

    Saudi Arabia needs higher prices as it wants to list its state giant oil firm Saudi Aramco next year.

    It has also faced several years of record budget deficit and has had to dip into its foreign exchange reserves to plug fiscal holes.

    The JMMC also includes Kuwait, Venezuela, Algeria and Oman.

  • Oil inches up ahead of producer meeting; Nigeria, Libya output in focus

    Oil inches up ahead of producer meeting; Nigeria, Libya output in focus

    Oil prices inched up but held near a one-week low on Monday ahead of a joint OPEC and non-OPEC meeting later in the day that may address rising output in Nigeria and Libya.

    London Brent crude for September delivery was up 12 cents at 48.18 dollars a barrel by 0651 GMT.

    The contract settled down 1.24 dollars, or 2.5 per cent, on Friday after a consultancy forecast a rise in OPEC production for July.

    NYMEX crude for September delivery was up seven cents at 45.84 dollars a barrel.

    Ministers from OPEC and other non-OPEC producers will meet in the Russian city of St Petersburg on Monday to review market conditions and examine any proposals related to their pact to cut output.

    Sources familiar with the talks said the meeting may recommend a conditional cap on production from Nigeria and Libya, two OPEC members so far exempt from output cuts, although some analysts were deeply skeptical the group would make such a move.

    “Output cuts by Libya and Nigeria would be next to impossible considering Libya was just re-emerging from the civil war, for example,” said Kaname Gokon, strategist for commodities brokerage Okato Shoji in Tokyo.

    OPEC and some non-OPEC states including Russia agreed last year to cut production by 1.8 million barrels per day (bpd) in a deal that has been extended to March 2018.

    Russian Energy Minister Alexander Novak said Libya and Nigeria should cap output when their output stabilises, the Financial Times reported.

    Kuwait’s oil minister, Essam al-Marzouq, said on Saturday that compliance was good with oil production cuts by OPEC and non-OPEC countries and that deeper curbs were possible.

    Meanwhile, OPEC Secretary-General Mohammad Barkindo said on Sunday that a rebalancing of the oil market is progressing more slowly than expected, but will speed up in the second half of 2017.

    “Oil looks likely to remain stuck in a tight range, as investors await any signs that OPEC will intensify its effort to rebalance the market,” ANZ bank said.

    The U.S. is considering financial sanctions on Venezuela that would halt dollar payments for the country’s oil, sources told Reuters, which could severely restrict the OPEC nation’s crude exports.

    The International Monetary Fund on Monday kept its growth forecasts for the world economy unchanged for this year and 2018, although it slightly revised up growth expectations for the eurozone and China.

  • Kuwait: it’s premature for OPEC to cap Libya, Nigeria oil output

    The market is on a recovery track due to rising global demand, Kuwait’s Organisation of the Petroleum Exporting CountriesGovernor Haitham Al-Ghais told Reuters.

    In an effort to eradicate a supply glut, the OPEC is curbing output by 1.2 million barrels per day (bpd) until March 2018, while Russia and other non-OPEC producers are cutting half as much.

    But oil prices have fallen more than 15 percent this year due to still-booming supplies and stubbornly high global stocks, which remain way above OPEC targets despite the cut agreement.

    A ministerial committee from OPEC and non-OPEC countries, which is headed by Gulf OPEC member Kuwait, meets in Russia on July 24 to discuss compliance with the cuts, from which Nigeria and Libya are exempted due to years of output-sapping unrest.

    “All this talk about putting a production cap on Libya and Nigeria is premature,” Al-Ghais said. “Data so far is showing that the real spike in production only happened in June.”

    The official added that output had increased on average by between 300,000 and 500,000 bpd from the two countries combined since the start of the supply-cutting agreement in January 2017.

    He said representatives from Libya and Nigeria had been invited to a technical OPEC/non-OPEC committee meeting on July 22 ahead of the ministerial gathering, to give presentations on production from both countries.

    “We have to look at the sustainability and stability of production from those countries,” said Al-Ghais, who also heads the technical committee. “We need to wait and see more production data before we can make any decision.”

    The technical committee could make recommendations on Nigeria and Libya, which the ministerial committee would then review. The latter cannot take production decisions but can make recommendations to OPEC and other participating producers, which are scheduled to meet formally in November.

    Al-Ghais said that despite production increases from Libya and Nigeria, there were signs of market rebalancing including U.S. government data showing a large drop in stockpiles.

    “We feel that the market is on the right way of correcting itself,” he said. “Demand will pick up and we expect to see stronger demand in the third quarter.”

     

  • Kuwait: it’s premature for OPEC to cap Libya, Nigeria oil output

    The market is on a recovery track due to rising global demand, Kuwait’s Organisation of the Petroleum Exporting CountriesGovernor Haitham Al-Ghais told Reuters.

    In an effort to eradicate a supply glut, the OPEC is curbing output by 1.2 million barrels per day (bpd) until March 2018, while Russia and other non-OPEC producers are cutting half as much.

    But oil prices have fallen more than 15 percent this year due to still-booming supplies and stubbornly high global stocks, which remain way above OPEC targets despite the cut agreement.

    A ministerial committee from OPEC and non-OPEC countries, which is headed by Gulf OPEC member Kuwait, meets in Russia on July 24 to discuss compliance with the cuts, from which Nigeria and Libya are exempted due to years of output-sapping unrest.

    “All this talk about putting a production cap on Libya and Nigeria is premature,” Al-Ghais said. “Data so far is showing that the real spike in production only happened in June.”

    The official added that output had increased on average by between 300,000 and 500,000 bpd from the two countries combined since the start of the supply-cutting agreement in January 2017.

    He said representatives from Libya and Nigeria had been invited to a technical OPEC/non-OPEC committee meeting on July 22 ahead of the ministerial gathering, to give presentations on production from both countries.

    “We have to look at the sustainability and stability of production from those countries,” said Al-Ghais, who also heads the technical committee. “We need to wait and see more production data before we can make any decision.”

    The technical committee could make recommendations on Nigeria and Libya, which the ministerial committee would then review. The latter cannot take production decisions but can make recommendations to OPEC and other participating producers, which are scheduled to meet formally in November.

    Al-Ghais said that despite production increases from Libya and Nigeria, there were signs of market rebalancing including U.S. government data showing a large drop in stockpiles.

    “We feel that the market is on the right way of correcting itself,” he said. “Demand will pick up and we expect to see stronger demand in the third quarter.”

     

  • OPEC sees surplus, lower demand for oil

    OPEC sees surplus, lower demand for oil

    The Organisation of Petroleum Exporting Countries (OPEC) yesterday said its oil production jumped in June and forecast world demand for its crude will decline next year as rivals pump more. It pointed to a market surplus next year despite an OPEC-led output cut.

    Giving its first 2018 forecasts in a monthly report, the oil cartel said the world will need 32.20 million barrels per day (bpd) of crude from its members next year, down 60,000 bpd from this year.

    It said its oil output in June rose above the demand forecast, led by gains in Libya and Nigeria, two members exempt from the cut aimed at eliminating excess supply. Its officials nonetheless remain upbeat on the outlook.

    “We remain very optimistic (about) helping the market to rebalance itself,” OPEC Secretary-General Mohammad Barkindo said at an industry conference in Istanbul.

    Oil rose above $48 a barrel yesterday as a United States (U.S.) report of falling inventories in the U.S. raised hopes that the glut is easing.

    OPEC referred to an “ongoing rebalancing” of the market.

    Under the supply deal, it is curbing output by about 1.2 million bpd, while Russia and other non-OPEC producers are cutting half as much, until March next year.

    The group’s production has increased in recent weeks, in part due to the recovery in Libya and Nigeria, which were exempted from the supply cut as domestic conflict had curbed their output.