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Tag: OPEC

  • OPEC’s June output rises as members fill in for Iraq loss

    OPEC’s June output rises as members fill in for Iraq loss

    ORGANISATION of Petroleum Exporting Countries (OPEC) crude production climbed for a second month in June as gains in Saudi Arabia and Nigeria made up for the loss of Iraqi barrels, a Bloomberg survey showed.

    Production by the 12-member OPEC rose by 278,000 barrels a day to 30.223 million, according to the survey of oil companies, producers and analysts.

    Last month’s total was revised 43,000 barrels a day lower to 29.945 million because of changes to the Kuwaiti, Libyan and Ecuadorian estimates.

    Violence flared in Iraq, OPEC’s second-biggest producer, this month as a militant group seized Mosul, the country’s biggest northern city, and advanced south toward Baghdad. Fears that the upsurge may ignite a civil war sent prices higher.

    “There was panic when the first headlines came from Iraq,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “There may have been an overreaction elsewhere. Things have stabilised and it doesn’t appear that all of those additional barrels will be needed.”

    Brent crude for August settlement dropped 94 cents, or 0.8 per cent, to close at $112.36 a barrel on the London-based ICE Futures Europe exchange. Brent, the benchmark for more than half the world’s oil, reached $115.71 on June 19, the highest level since September 9. West Texas Intermediate oil fell 37 cents, or 0.4 per cent, to settle at $105.37 on the New York Mercantile Exchange.

    Iraqi production tumbled 400,000 barrels a day to 2.9 million this month, according to the survey. It was the biggest drop in June and left the country pumping the least oil since September.

    The fighting hasn’t spread to southern Iraq, home to about three-quarters of the nation’s oil output.

    The production cuts occurred in the north, where the pipeline from Kirkuk to Ceyhan on Turkey’s Mediterranean coast has been shut since March because of sabotage. The missing output would have supplied Iraqi needs. The 310,000-barrel-a-day Baiji refinery, Iraq’s biggest, has been closed since militants first attacked it on June 15.

  • OPEC keeps output at 30m bpd

    OPEC keeps output at 30m bpd

    Members of the Organisation of the Petroleum Exporting Countries (OPEC) at the end of its 165th meeting in Vienna, Austria, agreed to keep their collective production at 30 million barrels per day (bpd).

    The decision was taken based on current market fundamentals, which OPEC members considered good for the enough for the global oil market. The organisation’s members after reviewing the market developments, world economic growth, and supply/demand projections for the second half of the year, agreed that the market is well supplied and doesn’t need extra production.

    OPEC secretariat said: “The conference reviewed recent oil market developments and world economic growth, as presented by the Secretary General HE Abdalla S. El-Badri, in particular supply/demand projections for the second half of the year, as well as the outlook for 2015, noting that the relative steadiness of prices during 2014 to date is an indication that the market is adequately supplied, with the periodic price fluctuations being more a reflection of geopolitical tensions than a response to fundamentals.

    “The conference observed, however, that, whilst world economic growth was projected to reach 3.4 per cent in 2014, up from 2.9 per cent in 2013, downside risks to the global economy, both in the OECD and non-OECD regions, remain unchecked.

    “The conference noted, moreover, that whilst world oil demand is expected to rise from 90 million bpd in 2013 to 91.1 million bpd in 2014, non-OPEC supply is projected to grow by 1.4 million bpd, with OECD stock levels, in terms of days of forward demand cover, remaining comfortable.

  • OPEC urges Nigeria, others to invest $40b upstream

    OPEC urges Nigeria, others to invest $40b upstream

    The Organisation of Petroeum Exporting Countries (OPEC) has advised  Nigeria, Libya, Algeria, and 10 other members to invest an average of between $35 billion and $40 billion in the upstream sector over the next 10 years to prevent shortfall in global crude production.

    OPEC’s Secretary Abdalla S. El-Badri, in a paper entitled: ‘Global Oil Outlook for OPEC and Non-OPEC Members,’ said a  long-term investment of over $50billion is also expected from the members, while the non-OPEC countries will invest more than $170 billion to meet demands.

    He said: ‘’In terms of the upstream, most of the investment will be made in non-OPEC countries. In the medium-term, non-OPEC members  will invest more than $170 billion each year. OPEC, on the other hand, would need to invest an average of $35 and $40 billion annually in the coming decade, and then over $50 billion annually in the long-term.

    ‘’It is important to underscore just what investments we are talking about. In OPEC’s World Oil Outlook (WOO) 2013, it is estimated that global upstream investment requirements between 2012 and 2035, are $5.2 trillion. Combined with expected requirements in the midstream and refining industries, this number approaches $8 trillion.’’

    He said OPEC liquids would increase by over 10 million barrels a day, from around 37 million in 2018 to over 47 million barrels a day  by 2035, adding that the figure is higher than the expected increase in non-OPEC liquids supply over the same period, at just under nine million barrels a day.

    ‘’ In terms of OPEC crude production, it is currently close to 30 million barrels a day. This is what is required by the market. The Organisation is making sure its consumer’s needs are met. In the medium-term, the call remains fairly steady – at around 29-to-30 million barrels a day. It means that OPEC spare capacity is expected to rise, although expectations are that this will be towards comfortable levels.’’ he added.

    El-badri said OPEC will continue to invest in existing capacity and new productions, stressing that the investments would be influenced by factors such as policies, and crude oil’ prices.

    According to him,  Brazil, Kazakhstan and other non- OPEC regions are also expected to see strong supply growth, both in the medium- and long-term.

    He said forecast on the oil glut in the third and fourth quarter of 2013 was not true, noting that supply and demand was relatively balanced during the period.  He said the need to focus on where oil supplies and long-term investments are coming from is imperative to determine the future of the market.

    He said OPEC targets stable price oil because it wants the stakeholders in the market to benefit.

    ‘’Our priority is a stable price – at a level that does not affect global economic growth and, at the same time, that allows producers to receive a reasonable income and invest in supply to meet future demand.

    ‘’Talking about the price, we also need to understand the cost of the marginal barrel. Specifically,  we asked ourselves at what price levels are expensive  projects become unworkable. It is clear that for some projects – for example, deepwater and Arctic fields, as well as most tight oil and oil sand play are expensive. ‘’ he added.

  • OPEC’s oil prices drop in March on economic, demand concerns

    The Organisation of the Petroleum Exporting Countries (OPEC) has said the prices of its grades of crude oil (OPEC Reference Basket) fell last month following concerns over China’s economic growth, lower refinery demand and ample availability, which outweighed supply outages and geopolitical tension.

    In its April Monthly Oil Market Report (MOMR), OPEC said its Reference Basket fell by $1.23 in March to average $104.15 per barrel.

    The report said: “The OPEC Reference Basket (ORB) slipped below the $105/b level in March to around $104/b, as the global crude market lost momentum over the month, impacted by concerns over a slowdown in China’s economic growth, lower demand and ample supply availability, despite ongoing production outages in Libya and geopolitical tension in Ukraine.

    “Crude prices fell in most regions, as northern hemisphere temperatures rose and refineries entered maintenance, while the situation between Russia and the Ukraine did not lead to any immediate energy supply losses. The Brent market reached its lowest outright prices in almost five months, as poor refining margins weighed on light sweet crude in Europe. Medium sour grades were also plentiful, as maintenance at Russian refineries frees up more crude for export.”

    It said ICE Brent declined by one per cent monthly amid extremely weak market fundamentals, despite drawing support from Libyan supply outages and the situation in Ukraine. Nymex WTI also fell, though moderately, remaining above the $100/b mark, steadied by a continued drawdown in oil stocks at Cushing, Oklahoma.

    On balance of supply and demand, the report noted that demand for OPEC crude in 2014 saw a downward revision of 0.1 million barrel per day (mb/d) to average 29.6 mb/d, representing a decline of 0.4 mb/d compared to last year.

    It said in Asia-Pacific, demand was thin, weighing on Middle East crude values and causing many to lower their official selling price formulae. In the US Gulf Coast (USGC), the sale of sour crude from the US Strategic Petroleum Reserve (SPR) weighed temporarily on sour grades, while the inland sour crude differential to WTI at Cushing widened significantly in the face of limited storage in Midland for rising crude output. Meanwhile, Libya’s exports have been well below the country’s capacity of around 1.25 mb/d since July 2013, it added.

    “On a monthly basis, the ORB dropped to an average of $104.15/b in March, down $1.23, or 1.17 percent, from the previous month. On a year-to-date basis, the ORB was also lower compared with the same period a year ago. The ORB year-to-date value stood at $104.73/b compared with an average of $109.48/b the previous year at the same period. On a quarterly basis, the ORB was $1.69 or 1.6 per cent lower than in the previous quarter,” it added.

    The report also said world oil demand is forecast to grow by 1.14 mb/d in 2014, broadly unchanged from the previous report, to average 91.2 mb/d. In 2013, world oil demand grew by 1.05 mb/d to average 90.01 mb/d, also in line with the prior assessment. The bulk of growth came from non-OECD, as most of the Organisation for Economic Cooperation and Development (OECD) is still showing a contraction.

  • OPEC puts Nigeria’s oil reserves at 37.1b barrels

    Nigeria’s crude oil reserves stood at 37.1billion last year, the Organisation of Petroleum Exporting Countries (OPEC) said in a report.

    The report titled: OPEC Share of World Crude Oil Reserves’’, stated that the figure represented 3.1 per cent of the 1,200billion reserves of the organisation.

    It said non-OPEC members had 277billion oil reserves, representing 19 per cent of the global oil reserves.

    It said Libya’s oil reserves stand at 48.5billion; Iraq(140billion); Venezuela( 297.7billion); Saudi Arabia(265.9billion); andIran( 157.3billion).

    Others are Algeria( 12.2billion); Angola(9.1billion); Ecuador(8.2billion); Qata(25.2billion); Iraq( 140.3billion); Kuwait( 101.5billion) and United Arab Emirates ( 97.8billion)

    ‘’According to current estimates, more than 81 per cent of the world’s proven oil reserves are located in OPEC’s member countries, with the bulk of OPEC’s oil reserves in the Middle East, amounting to 66 per cent of the OPEC total. OPEC member countries have made significant additions to their oil reserves in recent years. For example, by adopting best practices in the industry, realising intensive explorations, and enhancing recoveries. As a result, OPEC’s proven oil reserves stand at 1,200.83billion barrels.’’

    Nigeria is targeting 40billion oil reserves by 2020, a feat which the Nigerian Association of Petroleum Explorationists (NAPE) believes is realisable.

    Its President, George Osahon, said the 40billion barrels reserves and 4billion barrels per day is achievable, giving the reforms in the industry.

  • OPEC’s crude exports to drop amidst winter lull

    OPEC’s crude exports to drop amidst winter lull

    The Organisation of Petroleum Exporting Countries will cut crude shipments through mid-January amid a lull in winter demand in the Northern Hemisphere, according to tanker tracker Oil Movements.

    OPEC, supplier of about 40 percent of the world’s oil, will reduce sailings by 410,000 barrels a day, or 1.7 percent, to 23.65 million barrels in the four weeks to Jan. 18, the researcher said today in a report. That compares with 24.06 million in the period to Dec. 21. The figures exclude two of OPEC’s 12 members, Angola and Ecuador.

    “It’s just a pause in the winter cycle,” Oil Movements founder Roy Mason said by phone from Halifax,England. “There is a second winter peak in sailings to come early next month.”

    Global oil demand typically climbs during the fourth quarter, with rising consumption of heating fuels during the Northern Hemisphere winter. Brent futures traded near $107 a barrel in London today after losing 0.3 percent in 2013.

    Middle Eastern exports will decrease 1.7 percent to 17.3 million barrels a day in the month to Jan. 18, compared with 17.6 million in the previous period, according to Oil Movements. The figures include non-OPEC nations Oman and Yemen.

    Crude on board tankers will drop 0.6 percent to 485.2 million barrels through Jan. 18 from 488.17 million in the previous period, data from Oil Movements show. The researcher calculates volumes by tallying tanker bookings and excludes crude held on vessels for storage.

    OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The group will next meet on June 11 at its headquarters in Vienna.

  • OPEC to boost exports on winter fuel demand, says Oil Movements

    The Organisation of Petroleum Exporting Countries (OPEC) would increase crude shipments through late December as refiners boost purchases to meet winter heating demand, tanker tracker Oil Movements, said.

    OPEC, which supplies about 40 per cent of the world’s oil, will raise sailings by 710,000 barrels a day, or three per cent, to 24.22 million barrels in the four weeks to December 21, the researcher said in a report. That compares with 23.51 million in the period to November 23. The figures exclude two of OPEC’s 12 members, Angola and Ecuador.

    “It’s a move up to peak winter demand and refinery runs” in the northern hemisphere, Roy Mason, the company’s founder, said by phone from Halifax, England. He expects sailings from Saudi Arabia to rise in December.

    OPEC decided to maintain its production target at 30 million barrels a day at a meeting in Vienna this week. The group is “satisfied” with current demand, Ali al-Naimi, Saudi Arabia’s oil minister, told reporters at the end of three hours of closed-door talks yesterday. Brent crude futures have gained 0.6 percent this year, trading near $111.75 a barrel today.

    Middle Eastern exports will increase 2.3 per cent to 17.65 million barrels a day in the month to December 21, compared with 17.26 million in the previous period, according to Oil Movements. The figures include non-OPEC nations Oman and Yemen.

    Crude on board tankers will rise by 3.3 per cent to 488.84 million barrels through December 21 from 473.43 million in the previous period, data from Oil Movements show. The researcher calculates volumes by tallying tanker bookings and excludes crude held on vessels for storage.

    OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

  • Adopting LP gas as cooking energy of choice

    Adopting LP gas as cooking energy of choice

    As countries of the world sustain the ambition to find cheaper, cleaner and yet efficient alternative sources of energy, Nigeria cannot remain an onlooker rather the country should spearhead this change in the African continent.

    While the western economies headed by the United States of America are ever determined to broke the enormous power wielded by the Organisation of Petroleum Exporting Countries (OPEC) and its member nations, Nigeria’s search for alternatives must begin from reducing to the barest minimum subsidies on existing petroleum products which the nation produces in abundance.

    One of this area where the country spends huge resources in subsidy is kerosene. In spite of conflicting figures on how much is spent annually as subsidy for kerosene, authentic figures from the Pipelines Products Marketing Company (PPMC) indicates that the country on average spends close to N345 billion on DPK (kerosene) annually.

    Unfortunately, Nigeria produces a massive 3 Million Metric Tonnes of Liquified Petroleum Gas (LPG) per annum and there exists a government policy over the years to give equal and adequate attention in promoting local consumption of LPG which has not received as much attention as it should.

    With a huge gas reserve of 187tcf, the country has no excuse expending so much resource as subsidy for kerosene, rather government and its agencies should intensify effort at implementing existing policies concerning LPG and support this with the prerequisite awareness campaigns that will make this policy see the light of day and fully establish the country as a gas province.

    Ironically, because of the citizens’ die-hard attachment to the use of kerosene as a source of cooking energy, this globally acknowledged high production capacity in LPG has not translated into a cost saving product for the country.

    In fact, Nigeria still ranks the lowest among African countries on the per capita LPG consumption at a paltry 1.1kg in the continent.

    This poor utilization of LPG in the country is despite several intervention efforts that have been made by various segments of the society – public and private, to enhance the consumption of LP GAS in the country.

    Private Organizations like Gas To Health Initiatives, Oando PLC, TechnOil Ltd., and the Lagos State Government have through their sustained campaigns led to increase in consumption of LPG.

    This increase is still marginal as only last year did the country witness substantial increase by as much as 36.8% from an earlier 125,000MT to 171,000MT.

    It is encouraging to note that so far, consumption of cooking gas (LPG) in the country has exceeded 150,000 metric tonnes per annum (MMTPA), more than doubling the demand five years ago.

    There is no doubt that this growth in consumption may have been a direct effect of the publicity efforts embarked by the various groups and stakeholders in the sector.

    However, the consumption has not matched the various projects that has been put in place to enhance the supply and distribution of the product like the rehabilitation of the PPMC Butanization plants strategically located across the country in Ibadan, Lagos, Ilorin, Enugu, Kano, Gombe, Makurdi and Gusau.

    Added to this, the rehabilitation of most of the abandoned LP Gas plants across the country has ensured that Nigeria presently can boast of over 250 functional LP GAS plants in the country.

    The result of these efforts is that in July this year, Nigerian Liquified Natural Gas Company announced an increase in the quantity of LPG (cooking gas) it supplies to the Nigerian Market from 150,000 metric tonnes to 250,000 metric tonnes.

    As commendable as this new figure may be, it is still far from the Nigerian government’s aspiration of a per capita LPG demand of 3.7kg which is still miserly when compared to LPG consumption rate in other developing countries like Brazil and Indonesia which have successfully implemented Kerosene to LPG switching programmes in 56 million and 54 million homes, respectively.

    It is worthy of note the major barriers to achieving the desired LPG growth in Nigeria include poor infrastructure development like receiving jetty facilities, inadequate in-country shipping capacity, poor road conditions, inadequate storage and distribution facilities.

    Other factors that have hindered the switch range from the Kerosene subsidy which has made cost of LPG appear higher, high cost of cylinders and appliances, low income of larger number of the population, low public awareness of LPG as a suitable fuel for domestic cooking and its safety.

    And most critical of all the barriers is the lack of a sustainable focused Government policy and enabling framework on LPG development in the country.

    These barriers can be mitigated with a clear government policy with the objective of developing LPG utilization in Nigeria; corporate and government adoption of the kerosene to LPG programme as a means of reducing the huge subsidy on kerosene; a strategy of providing sufficient small cylinders and appliances for the rural and urban poor through a pilot scheme to increase LPG use in selected LGAs across the country.

    Other measures to bring LPG into the people’s homes and cooking places should include the provision of small skids for LPG storage and filling units attached to selected fuel stations or strategically safe locations.

    A deliberate and sustained LPG campaign outlining its benefits and safety practices, providing regulation to promote LPG business and ensure adherence to safe practice to ensure safe handling, outright removal of VAT on domestic LPG as well as Import Duties on Cylinders and its appliances, ensure sustainable supply and accessibility to all market segments, and expand the storage facilities as the consumption of LPG increases.

    It is worthy of note that if each of Nigeria’s Parliamentarian (109 senators, 360 Representatives) and 37 Governors would as a matter of social responsibility partake in the LPG development scheme by way of donating at least 1,000 (6kg or 3kg cylinders) to their constituency, on the average, Nigeria would have injected about 506,000 (6kg/3kg) cylinders into the market at once.

    And if a household consumes 12kg of LPG in a month, therefore a household will averagely consume 144 kg in one year. With the introduction of 506,000 (6kg/3kg) cylinders into the market this will automatically increase the number of cylinders currently in circulation by at least 25%.

    Although this figure appears marginal, but converting new users and contributing to LPG growth is key and this will have a spiral effect on the conversion of new users.

    Indeed, there are tremendous advantages that awaits the country, its citizens and businesses with increased usage of LPG in the domestic market.

    This will help reduce environmental hazard; create employment from new business opportunities; reduce respiratory health problems attributable to wood smoke and reduce poverty, among others.

    Government must rise to the occasion and galvanise the various agencies of the state to mount a campaign for this shift while partnering with the private sector towards creating a new attitude that will encourage the adoption of LPG thereby saving more revenue from the existing subsidy on kerosene.

    Ifeanyichukwu, a public analyst wrote from Lagos

     

  • OPEC exports to increase on refinery demand, oil movements says

    OPEC exports to increase on refinery demand, oil movements says

    The Organization of Petroleum Exporting Countries will bolster crude shipments through to mid-December, driven by Iraq and as refiners come out of maintenance, according to tanker tracker Oil Movements.

    OPEC, which supplies about 40 percent of the world’s oil, will raise sailings by 700,000 barrels a day, or 3 percent, to 24.05 million barrels in the four weeks to Dec. 14, the researcher said today in a report. That compares with 23.35 million in the period to Nov. 16. The figures exclude two of OPEC’s 12 members, Angola and Ecuador.

    “The main driver is the increase in capacity as refineries come out of maintenance both east and west of Suez,” Roy Mason, the company’s founder, said by phone from Halifax, England. The increase will come mostly from Iraq, while the “Saudis are lagging behind,” Mason said. This time last year, Saudi Arabia reduced exports “sharply” in an attempt to prevent prices from falling, he said.

    Brent crude futures were little changed from the beginning of this year, trading near $111 a barrel today.

    Middle Eastern exports will increase 3.1 percent to 17.64 million barrels a day in the month to Dec. 14, compared with 17.11 million in the previous period, according to Oil Movements. The figures include non-OPEC nations Oman and Yemen.

    Crude on board tankers will rise by 3 percent on Dec. 14 to 487.81 million barrels from 473.58 million four weeks prior, data from Oil Movements show. The researcher calculates volumes by tallying tanker bookings and excludes crude held on vessels for storage.

    OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. It will next meet in Vienna on Dec. 4

     

    Culled from Reuters

  • OPEC to boost export by 230,000 barrels

    The Organisation of Petroleum Exporting Countries (OPEC) will increase export by 230,000 barrels in the four weeks to October 12.

    OPEC, in its Outlook for last month, attributed the increase in export to the need to maximise output and further prevent shortfall that accompanies maintenance of refineries in the fourth quarter of the year.

    It said crude shipment would rise by one per cent during the period, adding that two of its members Angola and Ecuador were not affected by the development.

    “OPEC will increase crude shipments by one per cent next month as they maximise flows before refineries are shut for maintenance, according to Tanker Tracker Oil Movements. It’s what you’d expect to happen at this time of year as we start to get into refinery maintenance season. Its boring old seasonality and exports are likely to drift downward until the end of October, or start of November.”

    Refiners typically trim imports at the end of the third quarter while performing maintenance as summer demand in the northern hemisphere for gasoline and diesel dwindles, ‘it added.

    According to the report, crude on board tankers will increase 0.7 per cent to 483.79 million barrels on October 12.