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Tag: OPEC

  • OPEC expects oil demand growth

    OPEC expects oil demand growth

    Organization of Petroleum Exporting Countries (OPEC) sees no sign of global oil demand receding, rather, it expects it to rise to at least 120 million per barrel (mb/d) by 2050, according to its World Oil Outlook. OPEC also revised its estimate of global oil demand in 2045 to 118.9 million b/d, a 2.5percent upward revision on its 2023 estimate.

    It forecasts demand growth to be driven by Asia, the Middle East and Africa, where it expects demand to rise by 22 million b/d between 2023 and 2050. OPEC’s long-term optimism contrasts with recent downward revisions to 2024 and 2025 demand growth forecasts.

    It said Sept. 10 that global oil demand would grow by 2 million b/d in 2024-80,000 b/d less than the organization had forecast in August.

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    The Joint Ministerial Monitoring Committee, which oversees the OPEC+ crude production agreement, would meet Oct. 2 to discuss oil markets and production policy. Near-term forecasts for global demand would play a crucial role in its strategy up to the end of 2024 and through 2025.

    For 2025, it expects demand to rise a further 1.7 million b/d-a 40,000 b/d downward revision on its previous estimate. Non-OPEC+ supply will peak at 59 million b/d in the early 2030s, according to OPEC projections, and then decline to 57.3 million b/d by 2050.

    OPEC also said that the industry would require a cumulative $17.4 trillion investment in upstream and downstream projects to meet the demand in 2050.

  • OPEC+ delays production rollback till December

    OPEC+ delays production rollback till December

    In a bid to support the falling crude oil price, the Organisation of Petroleum Exporting Countries (OPEC) and its allies last week agreed to delay their plans to start a gradual process of rolling back 2.2 million barrels per day (bpd) of voluntary cuts by two months to December, in a bid to support sinking oil prices.

    The OPEC+ had planned to slowly reintroduce volumes cut by eight members — Saudi Arabia, Kuwait, Algeria, Oman, Kazakhstan, Iraq, Russia and the UAE – through late 2025, depending on market conditions and starting with 190,000 b/d in October.

    However, in a statement following an unannounced virtual meeting last Thursday, the countries said they would instead extend the cuts through November before gradually phasing them out between December 1 all through to the end of 2025.

    According to a table released by OPEC, the eight members will add a collective 189,000 bpd in December and 207,000 bpd next January, “with the flexibility to pause or reverse the adjustments as necessary.”

    S&P Global Commodity Insights quoting its sources noted that the negotiation was the product of extensive talks over recent days, as ministers weighed the potential market reaction to putting more crude on the market. It also reported that Iraq and Kazakhstan, who have overproduced their quotas for months, were pressured on their commitment to compliance.

    Crude prices have given up their summer gains, dragged down by tepid Chinese economic outlooks and a potential recovery in Libyan production from a week-long shutdown, and traders appeared unmoved by the OPEC+ announcement.

    On Thursday, Brent crude, benchmarked at $75.04 per barrel, fell by 0.25 per cent from the previous day and the lowest price since last December 13. ICE Brent futures, which had initially risen following news of the OPEC+ delay, quickly dropped, falling to a 15-month low of $73.16 per barrel at the London close after hitting an intraday high of $74.19 per barrel.

    The 2.2 million bpd of voluntary cuts are part of 5.8 million bpd the alliance is currently holding offline, denting its market share to rival producers from the Americas and other emerging plays.

    A day ahead of the decision, a delegate told Commodity Insights he was concerned that any OPEC+ production boost would be “negative to the market.” Meanwhile, in a note ahead of the decision, investment bank HSBC said that “holding off the production increase may be interpreted as a belated admission by OPEC that oil demand is weak.”

    Read Also:Hydrocarbons’ demand to hit peak in 2030 – OPEC

    The new start of the production rises coincides with the next OPEC+ ministerial meeting, scheduled for December 1 in Vienna.

    Oversupply concerns

    Dated Brent has fallen $7.20 per barrel since August 29, representing the height of an oil shutdown by Libya’s eastern faction in response to efforts by the western government in Tripoli to sack the head of the country’s central bank.

    While the crisis took 63 per cent of Libyan crude offline, according to the Libyan National Oil Corp., UN-led negotiations between the two parties on September 3 appeared to have defused the situation, fueling hopes of a resumption — and an oil sell-off.

    Payam Hashempour, research associate director at Commodity Insights, said the market reaction to the Libya talks reflected existing concerns about oversupply.

    Meanwhile, overproduction by Iraq and Kazakhstan this year, reaching 321,000 b/d and 95,000 b/d respectively in July, has reduced the alliance’s capacity to shore up the market, leading the countries to submit compensation plans.

    “The overproducing countries also reconfirmed their commitment that the entire overproduced volume will be fully compensated for by September 2025,” including overproduction in August, the group said in its statement.

    OPEC recently nudged down the estimated “call” on OPEC+ crude, the quantity of oil the alliance must produce to balance the market, from previous estimates, but still expects demand for its crude to outstrip supply in the next two quarters.

    The group sees the call on OPEC+ crude in the fourth quarter of 2024 at 43.8 million b/d, and Q1 2025 at 42.6 million b/d, according to the latest monthly oil market report in August, well above July output of 40.907 million b/d, as judged by secondary sources, including the Platts OPEC+ Survey from Commodity Insights.

  • Hydrocarbons’ demand to hit peak in 2030 – OPEC

    Hydrocarbons’ demand to hit peak in 2030 – OPEC

    The Organization of Petroleum Exporting Countries (OPEC) stated on Tuesday, July 2, that the demand for hydrocarbons is projected to peak by 2030, despite calls to discontinue investment in the energy sector.

    OPEC’s Secretary General, Haitham Al Ghais made this prediction in his virtual address at the 2024 Nigerian Oil and Gas (NOG) conference.

    He said: “Despite these facts, I am certain you are aware of some recent predictions for peak demand by 2030 and calls for a discontinuation of investment in hydrocarbons.”

    He said those seeking stoppage of investment in hydrocarbon have lost touch with reality because governments and companies are already reviewing the energy transition strategies and timelines.

    The theme of the conference is: “Showcasing Opportunities, Driving Investment, Meeting Energy Demand,” I laud the organizers for providing a vital forum to discuss these key topics at a critical juncture in our industry.

    The OPEC scribe said: “These voices are not in touch with reality, and now we are seeing large corporations and governments re-evaluate their transition strategies and timelines.”

    He said the rush to adopt “Net-Zero” strategies was misguided and simply not realistic.

     Al Ghais urged developing countries to continue to balance priorities between developing their national economies and addressing climate change.

    He said in this regard, OPEC and its Member Countries continue to advocate for a balanced and fair process for adaptation, mitigation and the means of implementation, particularly concerning climate finance and technology.

    The Secretary-General said this is crucial for Africa to ensure its unique circumstances are respected and taken into consideration.

    He tasked the stakeholders not to relent in their efforts to tackle the issue of energy poverty.

    Al Ghais noted that it is an unfortunate fact that still today, there are an estimated 675 million people with no access to basic forms of energy and 2.3 billion without access to clean cooking fuels.

    He charged that World leaders must unite and advocate for the necessary support and resources to make a difference in addressing this important matter.

    The OPEC boss said the cartel sees a bright future ahead for energy, with significant opportunities for robust long-term growth.

    Continuing, he said, “Why are we optimistic?  Let us consider these statistics, which are based on OPEC’s World Oil Outlook:

    “We see energy demand rising by an estimated 23% by 2045

    This will be fueled by a world economy that is expected to double in size, growing from $138 trillion last year to $270 trillion in 2045

    “We also forecast a rapidly expanding world population that will surpass 9.5 billion people, with most growth seen in non-OECD developing countries

    Urbanization alone will account for over half a billion people moving to cities around the world by 2030.

    Read Also: OPEC defends phase out of production cut amidst anxiety

    “This data tells us that the world will require all forms of energy to meet long-term energy needs.

    “Oil and gas will remain the predominant fuels in the energy mix. In fact, oil alone will retain its share at almost 30% in 2045 as world demand for oil soars to an estimated 116 mb/d by that time.

    “To meet this rapid and robust growth in energy consumption, the industry will need to boost investment levels significantly in the years to come.

    “According to our research, cumulative oil-related investment requirements from now until 2045 will amount to approximately $14 trillion or around $610 billion on average per year.

    “Securing this vital funding is essential to maintaining security of supply and avoiding unwanted volatility.”

  • The answer

    The answer

    • It’s time to enhance non-oil exports for a better tomorrow

    There is no better time to pay quality attention to the structure of the Nigerian economy than now. The situation is so chaotic that even many educated people, including economists, are at a loss about the state of the national financial system. Despite having the largest population in Africa, the largest concentration of black people, and being one of the most endowed countries, Nigeria is identified as about the poorest in the world. The most recent survey by the National Bureau of Statistics (NBS) famously puts multidimensional poverty in the country at 133 million people.

    This is not worrisome to only the government, but the people who bear the brunt. Many in the international community are surprised that a country could be so rich and yet so poor. Rich in human resources, the hydrocarbons, solid minerals and so vast arable land. Experts in the oil sector have cried out that the days of petroleum products commanding so much attention and dictating the economic pace would soon be over. Alternative sources of energy are rapidly attracting the attention of developed countries that consume much of the products. And, even before then, owing to carelessness and criminality, Nigeria has been unable to meet up its OPEC quota in recent years. Production of crude oil stood at barely 1.2 million barrels by the end of 2023. Theft of the product that is so central to national revenue has hardly abated since then, with the security forces daily announcing discovery and destruction of illegal refinery.

    It would not have had so grave an effect on the economy if the oil boom of the 1970s and 1980s had not proved to be so great a doom as successive governments abandoned the agriculture sector that had been the mainstay of the economy in the preceding decade. The four main lines of agriculture, crop production, fishery, livestock and forestry had, in the pre-independence and the ‘60s spurred the engine of development, with the Western Region deriving so much from cocoa, cotton and groundnuts in the North and palm oil with timber in the East.

    In the 1960s, agriculture contributed more than 50 per cent of the Gross Domestic Product (GDP). Today, despite about half the population are still engaged in agriculture, it only contributes a little less than one-quarter to the GDP. Nigeria has more than 70 million hectares of arable land, much of it still fallow, but it depends on importation of critical inputs. The younger population that constitutes more than two-thirds of the demographics has no interest in tilling the soil, leaving only the old and bent in the rural areas to feed the nation through subsistence farming. Herders still roam the forests in the 21st Century.

    Thus, the little products exported are sent raw, no value added.

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    It is not only in agriculture that little progress has been made. In industry, we lag behind many other countries, even in Africa, as households and firms compete for the less than 4,000MW of electricity being generated, while South Africa is already supplying about 50,000MW to the people. Successive Nigerian administrations have been promising to ramp up production and distribution to 10,000MW since the  inception of the Fourth Republic in 1999. The resultant reliance on imported diesel to power imported generating sets made Nigeria- produced goods too expensive to compete with the imported ones.

    Another impediment to non-oil exports is failure to meet international standards. Whether in Europe, United States or Asia, there are minimum standards for all imports, agricultural or manufactured goods.

    Unlike in the 1950s and ‘70s when the regions had marketing boards that assured standards of the products as well as assisted exporters in packaging, finance and inputs, very little is available today despite having such bodies as the Nigerian Export Promotion Council  (NEPC) and the Standards Organisation of Nigeria  (SON).

    The Tinubu administration that has promised to raise non-oil exports should ensure that these organisations work in Nigeria’s interest.

    We watch the solid minerals sector with cautious optimism as the minister in charge has pledged to ensure that it is given a pride of place. He deserves all the backing he needs in a bid to catch up with the likes of South Africa,  Canada, Russia, Australia and Japan where solid minerals contribute a huge percentage of their revenue and generate employment. Nigeria’s gold, uranium, iron ore, bauxite, among others, should be officially exploited and sold to boost the economy.

    As the Tinubu administration approaches its first year anniversary, it owes Nigerians a duty of reviewing its plans and reevaluating moves to lift the nation out of the woods, even if it has to jettison prescriptions by the Bretton Woods institutions.

  • OPEC rules out oil production policy change

    OPEC rules out oil production policy change

    The Organisation of Petroleum Exporting Countries (OPEC) and the broader OPEC+ group do not see any need to propose a change to the oil production policy when the Joint Ministerial Monitoring Committee (JMMC) meets next week, according to delegates, commodity analyst Giovanni Staunovo yesterday.

    OPEC+ members have decided to cut 2.2 million barrels per day (bpd) from the group’s production this quarter, although much of that was production cuts that were already in effect, including Saudi Arabia’s 1 million bpd voluntary cut.   

    Early this month, the members of the OPEC+ alliance that had pledged the Q1 cuts announced they would roll over the supply reductions until the end of the second quarter.

    Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, Oman, and Russia are now cutting their respective crude oil production and exports in the first half of 2024 with extra voluntary reductions, on top of the voluntary cuts OPEC+ previously announced in April 2023 and later extended until the end of 2024.

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    When the OPEC+ members announced on March 3 their intentions to extend the cuts into the second quarter, Russia changed its production/export cut plan and said that in the second quarter it would reduce supply by 471,000 bpd in the form of cuts to oil production and exports. In April, Russia will reduce production by 350,000 bpd and exports by 121,000 bpd. In May, the 471,000 bpd reduction would be in the form of a 400,000-bpd cut to production and 71,000 bpd cut to exports, and in June the Russian supply cut would be 471,000 bpd entirely from production reductions.

    The production estimates for February have shown that some of OPEC+ members – especially Iraq and Kazakhstan – continued to overproduce above their respective quotas.

    In the middle of February, both Iraq and Kazakhstan pledged to comply with the cuts they had announced.

    OPEC’s second-largest producer, Iraq, is committed to its voluntary cut in the OPEC+ agreement and will produce no more than 4 million bpd of crude oil, Iraq’s Oil Minister Hayan Abdel-Ghani said in February.

    Non-OPEC oil producer Kazakhstan, for its part, vowed to compensate over the coming months for a lack of compliance with the cuts in January.

  • Nigeria, others boost OPEC’s Feb. production

    Nigeria, others boost OPEC’s Feb. production

    Despite the voluntary production cuts of several major producers of the non-members of Organisation of Petroleum Exporting Countries (OPEC+) alliance and OPEC’s oil production rose in February by more than 200,000 barrels per day (bpd) compared to January, driven by higher production in Nigeria and Libya, which is exempted from the OPEC+ supply cuts.

    Crude oil production from  OPEC members jumped by 203,000 bpd from January to 26.57 million bpd in February, OPEC’s Monthly Oil Market Report (MOMR) showed on Tuesday.

    The biggest increase in output came from Libya, which has been exempt from the OPEC+ cuts due to its unstable security situation, as well as from Nigeria, which has underperformed compared to its quotas in recent years, due to a lack of investments and frequent sabotages and theft on onshore pipelines.

    Libya has restored oil production at its largest oilfield, Sharara, which was shut down for three weeks in January by protesters.

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    Last month, Libya’s oil production rose by 144,000 bpd, while Nigeria’s output increased by 47,000 bpd compared to January.

    OPEC’s top producer, Saudi Arabia, produced 8.98 million bpd last month, in line with its pledge to keep output at about nine million bpd after promising a one-million-bpd cut that has been in place since last summer.

    But the second-biggest producer of the cartel, Iraq, pumped around 200,000 bpd more than its pledge to keep production at 4 million bpd, as it only reduced output by 14,000 bpd, according to the secondary sources in OPEC’s report. Iraq’s oil production averaged 4.2 million bpd last month, per the sources.

    Some OPEC+ producers, including Saudi Arabia, Iraq, Kuwait, the United Arab Emirates (UAE), and Algeria, announced earlier this month that they would roll over their production cuts – initially for the first quarter – into the second quarter, too. They are joined in this OPEC+ effort by non-OPEC producers Russia, Kazakhstan, and Oman.

  • Nigeria has made positive contributions to OPEC – Secretary-General

    Nigeria has made positive contributions to OPEC – Secretary-General

    The Secretary General of the Organisation of the Petroleum Exporting Countries (OPEC), Haitham Al-Ghais, said Nigeria had made positive contributions to the organisation since becoming a member in 1971.

    Al-Ghais said this in an interview with newsmen on the sidelines of the ongoing 7th Nigeria International Energy Summit (NIES 2024) on Thursday in Abuja.

    He described Nigeria as a critical and integral part of the organisation, and that the country had played outstanding roles with positive contributions that had impacted the decisions of OPEC.

    He extolled the valuable contributions of Nigeria’s public servants who had served as OPEC Secretary-General and President of OPEC Ministerial Conference, among others.

    “It is an honour for me to come to Nigeria, to participate in the 7th summit organised by one of our important member countries in OPEC.

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    “It is my first official visit to Nigeria since my assumption of office as the OPEC Secretary-General, a long overdue visit.

    “I congratulate Nigeria for hosting such a widely attended and effective gathering at a time when it is critically needed not only for Nigeria but for Africa and the world, where energy leads in discussion.

    “I had an opportunity of meeting many Nigerian dignitaries and we exchanged views on the status of the global energy market, transition and its implication for Africa and the world at large,” he said.

    The OPEC Secretary-General said energy security was an important component, adding that energy transition could not be discussed without looking at energy security.

    He said he was happy that the summit also discussed energy poverty, which Africa had recorded with so many people lacking access to basic electricity.

    “The summit presented a very good chance for people to discuss all these aspects with a global perspective, as Nigeria takes its transition forward while also continuing to depend on the conventional source of energy, oil and gas,” he said.

    According to Al-Ghais, Nigeria and OPEC have things in common as Nigeria became an independent nation in 1960, the same year OPEC was formed.

    “The relationship between Nigeria and OPEC will continue to flourish in the years to come with support for each other.

    “Nigeria is the largest oil producer in Africa and an important player in the global scene.

    “Oil represents such an important part of the Nigerian economy and Nigerian development, and will continue to do so in decades to come,” he added.

    (NAN) (www.nannews.ng)

  • JUST IN: Nigeria’s oil output rises by 7.7% – OPEC

    JUST IN: Nigeria’s oil output rises by 7.7% – OPEC

    Nigeria’s oil production increased month over month (MoM) by 7.7% to 1.4 million barrels per day (bpd) in December 2023 from 1.3 million bpd in November 2023.

    This was revealed by the Organization of Petroleum Exporting Countries (OPEC) in its Monthly Oil Market Reports (MOMRs).

    OPEC also said that the figures were derived from secondary sources.

    Read Also: Nigeria gains as OPEC pumps 28.05m barrels

    According to the January 2024 MOMR, Nigeria continues to be the largest oil-producing and exporting country in Africa, while Equatorial Guinea finishes bottom with only 55,000 bpd.

    Details shortly…

  • Nigeria gains as OPEC pumps 28.05m barrels

    Nigeria gains as OPEC pumps 28.05m barrels

    Nigeria gained from the oil production output cut by the United Arab Emirates (UAE) and Angola last December, offsetting the shortfall in the Organisation of Petroleum Exporting Countries (OPEC) quota for the market.

    This is just as OPEC announced it pumped 28.05 million barrels per day (mbpd) last month, as it persevered with supply restraints agreed earlier in the year.

    With supplies declining from UAE and Angola, a 50, 000 barrels per day (bpd) increase in Nigeria’s crude oil supply which brought her output to 1.49mmbpd last month, bolstered supplies by OPEC into the market. The 50,000 bpd increase is also in line with a revised quota that the country successfully negotiated for this year.

    The UAE made last month’s biggest supply reduction, cutting by 70,000 bpd to 3.08 MMbpd. But in spite of this reduction, the 3.08MMbpd production still places the UAE’s output above its quota for last month and also higher than a new, increased target that takes effect this month.

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    For Angola, a country which may have had its last quota as a member of OPEC following the announcement of her exit from the organisation, had her production output decline, once again, dwindling by 40,000 bpd to 1.1 MMbpd. It would be recalled that following a dispute over her production quota, Angola had announced late last month it would quit the group, effective January 1, 2024, thus ending her 16 years of membership. While Angola had refused to accept a reduced limit imposed by OPEC’s leaders, but its output last December eroded by years of underinvestment, was in line with the level it had rejected.

    Similarly, Iraq, which has a patchy track record on implementation and pressing financial needs for export revenue, would need to cut production by a substantial 290,000 bpd in order to meet its target for this month.

    Arising from this, stakeholders in the oil market are weary that production may further fall this month as the wider coalition of the organisation, known as OPEC+, begins additional cuts of about 900,000 bpd in a bid to stave off a new surplus and defend flagging crude prices. This is as oil futures have slumped by about 20 per cent since it neared $100 a barrel, four months ago, amid surging supplies from the U.S. and OPEC’s other rivals.

    But it is feared that the extra crude could prove too much for global fuel demand, which is projected to see  slower growth this year. This is because going by the estimation of crude traders are skeptical that the 22-member nation OPEC+ will fully deliver on the fresh supply curbs taking effect this month, as many members have already lost as much in production output and associated revenue.

    The International Energy Agency (IEA) estimates the pledged cutback will translate into an actual cut of about 500,000 bpd.

    OPEC+ will hold an online monitoring meeting to review market conditions on next month and ministers are scheduled to meet physically at the group’s Vienna headquarters in early June.

  • OPEC+ to meet on production quota

    OPEC+ to meet on production quota

    The Organization of Petroleum Exporting Countries, (OPEC+) is planning a meeting of its Joint Ministerial Monitoring Committee (JMMC) in early February, though an exact date has not been decided, three sources from the alliance said.

    The OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies led by Russia, usually holds such meetings every two months to monitor the implementation of its production agreements.

    The Committee brings together leading countries within the alliance, including Saudi Arabia, Russia and the United Arab Emirates.

    Read Also: Increased oil output by global producers, Angola’s exit to dip OPEC’s quota

    At its last full ministerial meeting on November 30, OPEC+ agreed to voluntary output cuts totalling about 2.2 million barrels per day (bpd) during the current quarter, led by Saudi Arabia rolling over its current voluntary cut.

    The JMMC meeting is expected to assess the deal’s implementation in January, one of the sources said.

    Last month, OPEC member Angola quit the group because it was unhappy with the production quota it was given.