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Tag: OPEC

  • OPEC ripping off consumers, says Trump

    US President Donald Trump has criticised the Organisation of Petroleum Exporting Countries (OPEC) and its members for taking undue advantage of oil consuming nations by keeping oil prices high.

    Trump, who spoke at the United Nations General Assembly in New York yesterday, lashed out at OPEC and its allies for keeping oil price high, saying that high oil prices negatively affect the economies of the world. He urged oil consuming nations not to rely on OPEC, stressing the importance of energy independence.

    He said: “OPEC and OPEC nations are as usual, ripping off the rest of the world, and I don’t like it, nobody should like it. We defend many of these nations for nothing and then they take advantage of us by giving us high oil prices,” stressing, “it ‘s  not good.” He called on other nations not to rely on OPEC, lamenting the dependence Germany has on Russia.

    The U.S. President spoke against the backdrop of rising oil price, which rose Monday to a four year-high at $81 per barrel and to $82 per barrel yesterday.

    Oil prices jumped more than two per cent to a four-year high on Monday after Saudi Arabia and Russia ruled out any immediate increase in production. The refusal of OPEC to raise production negates the call by Trump for action to raise global supply.

    Benchmark crude, Brent hit its highest since November 2014 at $80.94  per barrel, up $2.14  or 2.7 per cent, before easing to around $80.75 dollars. U.S. light was $1.25 higher at $72.03.

    “This is the oil market’s response to the OPEC and allies’ refusal to step up its oil production,” said Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt.

    OPEC leader Saudi Arabia and its biggest oil-producer ally, Russia, on Sunday rebuffed a demand from Trump for moves to cool the market.

    Iranian Minister of Petroleum has welcomed OPECs decision effectively rebuffing President Donald Trump’s calls for a hike in oil output, saying US empty dream to zero Irans oil exports would not realize. ‘The US seeks to reduce Iranian oil exports to zero even for a month, but that dream would not come to reality,’ Bijan Zangeneh said on Monday.

    Crude oil prices touched new four-year highs yesterday as Brent crude – the international benchmark for crude oil – touched $82.20 a barrel.  That marked a level beyond the last peak witnessed in November 2014. Expectation of a tightening supply in the global oil market in the coming months has pushed crude oil prices higher, say analysts. The impending sanctions by the United States on Iran, the third-largest producer among OPEC, which will go into effect November 4, the rising domestic petrol and diesel prices, which touched new record highs in the backdrop of continued weakness in the rupee against the US dollar, and the high crude oil prices that tend to widen the current account deficit for India, which meets more than 80 per cent of its oil requirement through imports, contribute to high oil prices.

    The International Energy Agency (IEA) forecasts strong oil demand growth of 1.4 million barrels per day (bpd) this year and 1.5 million bpd in 2019, and said in its most recent report that the market was tightening.

    OPEC and non-OPEC including Russia, Oman and Kazakhstan, met at the weekend to discuss a possible increase in crude output. However, the upshot of the gathering was that the group was in no rush to do so.

    “After the weekend’s meeting, the voices of those who foresee 100 dollars a barrel and compare the current backdrop to the 2007/2008 bull run are getting louder,” said PVM Oil Associates strategist Tamas Varga.

    “Undoubtedly the oil market is expected to be tight in coming months and, if OPEC’s own numbers are to be believed, global oil inventories are to fall during the remainder of the year.”

    Richard Robinson, manager of the Ashburton Global Energy Fund, said higher prices are almost certainly on the cards. “We believe the combination of tight supply, healthy demand, falling global inventories – down from already under-stored levels – and anemic spare capacity helps support an oil price that could end the year above 90 dollars,” he said.

    Analysts expect crude oil prices to stay under pressure on the back of a deadlock on supply between the top producers and the world’s largest economy.

    Release of US crude data will be watched closely by oil investors going forward. “Given the current oil market scenario, we believe prices of crude oil are to rise around $78/bbl -$80/bbl unless the number of rigs deployed by the by the United States are increased,” said credit ratings agency CARE Ratings.

  • Oil price to be stable into 2019 as OPEC, U.S. meet supply needs

    Oil prices are likely to be stable this year and next as increased outputs from OPEC and the United States meet growing demand led by Asia and helps to offset supply disruptions from Iran and elsewhere, a Reuters poll has shown.

    A survey of 44 economists and analysts forecast Brent crude to average $72.87 a barrel in 2018, 29 cents higher than the $72.58 projected in the previous month’s poll and above the $71.68 average so far this year.

    U.S. crude futures were seen averaging $67.32 a barrel in 2018, compared with $66.79 forecast last month and an average of $66.16 until now.

    This is the 10th consecutive month in which analysts have raised their oil price forecasts.

    “We expect prices will largely remain range-bound in the second half of 2018 and 2019. On the one hand, robust U.S. shale production and market concerns over the brewing U.S.-China trade war will help keep a lid on prices,” said Cailin Birch, an analyst at the Economist Intelligence Unit.

    “On the other hand, the recent decline in global stocks will make prices more sensitive to any geopolitical risk, which will keep prices from falling significantly below current levels.”

    The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries agreed to raise supply in a meeting last month to meet rising global demand, but the group did not specify a clear target for the output increase.

    Meanwhile, U.S. sanctions on Iran that will come into force later this year will force a decline in exports and help support prices, analysts said.

    “The disruption to Iranian barrels will weigh on oil markets in the second half of 2018 and H1 2019 as there are few spare barrels in the market that can offset a big disruption to Iranian supplies,” said Emirates NBD commodities analyst Edward Bell.

  • OPEC output peaks amid outages

    The oil output of the Organisation of Petroleum Exporting Countries (OPEC) has risen this month to  it highets as Gulf members pumped more after a deal to ease supply curbs and Congo Republic joined the group. This is even as losses from Iran and Libya constrained the increase.

    The OPEC has pumped 32.64 million barrels per day in July, a  Reuters survey found yesterday found, up 70,000 bpd from June’s revised level and the highest this year with Congo added.

    OPEC and allies agreed last month to boost supply as U.S. President Donald Trump urged producers to offset losses caused by new U.S. sanctions on Iran and to dampen prices, which this year hit $80 a barrel for the first time since 2014.

    On June 22-23, OPEC, Russia and other non-members agreed to return to 100 per cent compliance with oil output cuts that began in January 2017, after months of underproduction in Venezuela and elsewhere pushed adherence above 160 per cent.

    Saudi Arabia said the decision would translate into an output rise of about 1 million bpd.

    OPEC’s collective adherence with supply targets has slipped to 111 per cent in July from a revised 116 per cent in June, the survey found, meaning it is still cutting more than agreed.

    Following the OPEC decision, Kuwait and the United Arab Emirates raised output by 80,000 bpd and 40,000 bpd respectively in July, the survey found.

    The bulk of the Saudi supply boost appears to have been delivered in June as Riyadh tapped storage tanks to push supply to 10.60 million bpd, near a record high. The increase infuriated Iran and surprised other OPEC members with its scale.

    Riyadh has boosted supply in July by a further 50,000 bpd from June’s revised level, the survey found, because domestic crude use in refineries and power plants has risen while exports have held close to June’s rate.

    Supply in Nigeria, often curbed by unplanned outages, rose by 50,000 bpd. Royal Dutch Shell’s Nigerian venture lifted force majeure on Bonny Light crude exports. Nigeria and Libya were exempt from the original supply-cutting deal.

  • OPEC output climbs as Saudi opens tap

    The Organisation of Petroleum Exporting Countries (OPEC) oil output rose last month as Saudi Arabia pumped at a near-record rate. This is a sign the world’s top exporter is heeding calls from the United States (U.S.) and other consumers for more oil, a Reuters survey showed yesterday.

    The oil cartel pumped 32.32 million barrels per day (bpd) in June, the survey found, up 320,000 bpd from May. The June total is the highest since January this year.

    Saudi Arabia’s move comes as U.S. President Donald Trump has been urging Riyadh to offset losses caused by new U.S. sanctions on Iran and to dampen prices, which this year hit $80 a barrel for the first time since 2014.

    OPEC and a group of non-OPEC countries agreed last month to return to 100 per cent compliance with oil output cuts that began in January last year, after months of underproduction by Venezuela and other countries pushed adherence above 160 per cent.

    Oil broker at PVM, Tamas Varga, said the second half of this year is replete with uncertainty.

    He said: “We are entering the second half of the year with a huge amount of uncertainty surrounding the supply side of the equation.

    “Depending on your belief you could just as easily bet on $100 as $60 by the end of the year.”

    Saudi Arabia said OPEC decision would translate into an output rise of about 1 million bpd, although the group’s statement gave no clear volume.

    As published on Friday, Saudi Arabia has boosted supply to 10.70 million bpd in June, close to the record high of 10.72 million bpd, to make up shortfalls in Venezuela and other countries, and expected losses in Iran.

    This has lowered OPEC’s collective adherence with supply targets to 110 per cent from 167 per cent in May, meaning the group is still cutting more than agreed even after the Saudi increase.

    The Saudi supply boost, apparently set in train before OPEC met in Vienna on June 22 to discuss policy, has infuriated Iran and surprised some other OPEC members with its scale.

    Saudi Arabia’s Gulf allies, Kuwait and the United Arab Emirates, have yet to follow the Saudi lead, keeping output steady in June, the survey found.

    Among other OPEC members, Algeria also increased output in June due to a diminishing impact from maintenance work and Iraq pumped more as its southern exports rose.

    The biggest decrease came from Libya, which remains unstable due to unrest. Output fell sharply from near 1 million bpd after an attack in mid-June at the ports of Ras Lanuf and Es Sider shut them down.

    Nigerian supply dropped due to loading delays affecting several of the country’s crude streams.

    Iranian output, expected to decline as the U.S. re-imposition of sanctions discourages companies from buying the country’s oil, slipped in June as exports fell from inflated levels in May and April.

    Output fell further in Venezuela, where the oil industry is starved of funds because of economic crisis.

    OPEC has an implied production target for 2018 of 32.78 million bpd, based on cutbacks detailed in late 2016 and taking into account changes of membership since, plus Nigeria and Libya’s expectations of 2018 output.

    According to the survey, OPEC pumped about 460,000 bpd below this implied target in June, not least because of the decline in Venezuela and a similar involuntary drop in Angola, where the survey found output further declined in June.

  • Oil dips on OPEC output increase

    Brent crude oil fell by more than one percent yesterday as investors prepar ed for the extra one million barrels per day (bpd) output increase the Organisation of Petroleum Exporting Countries (OPEC) and its partners including Russia agreed to bring to the market after their meeting on Staurday in Vienna, Austria.

    Brent crude futures fell $1.16 to $74.39 a barrel while U.S. light crude was up 16 cents at $68.74 a barrel, supported in part by a Canadian supply outage.

    Prices initially jumped after an OPEC deal to increase output was announced late last week, as it was not seen boosting supply by as much as some had expected.

    Despite the increase, which is intended to stop the gap between global supply and demand from becoming too wide, analysts said global oil markets would likely remain relatively tight this year.

    OPEC and non-OPEC partners including Russia have since 2017 cut output by 1.8 million bpd to tighten the market and prop up prices.

     

  • OPEC agrees to maintain 1.2m bpd production cut

    The Organisation of Petroleum Exporting Countries (OPEC) has agreed to maintain 1.2 million barrels per day (mmbpd) reduction in oil production reflecting daily production increase of 600,000 barrels.

    The 14-member group analyzed oil market developments since the organisation’s last meeting in Vienna at the end of November, and reviewed the outlook for the remainder of 2018, during its 174th OPEC conference yesterday, after a week of speculation a deal would be reached at all.

    “The oil market situation has further improved over the past six months, with the global economy remaining strong, oil demand relatively robust, albeit with some uncertainties, and with market rebalancing evidently continuing,” said OPEC President Suhail Mohamed Al Mazrouei, at a  press conference yesterday.

    A collective agreement was indeed doubtful given Iran’s voiced opposition to OPEC’s proposal to boost oil output by 1 million barrels per day beginning in July. After Iran softened its stance, a deal was reached, but the market is waiting on specifics.

    The secretive announcement doesn’t say how much production will be raised by, nor sets individual allocations to each member. Al Mazrouei said the issue of over-compliance has been resolved with this decision to continue the agreement till year-end, maintaining the compliance level at 100 per cent.

    He avoided placing a number on the approved increase and told the press to make their own calculations, while giving them his assurance “there will be no negative surprises” and that each country will comply appropriately.

    The member countries went home without an official quota/allocation of how much they could produce, with Al Mazrouei suggesting it’s “challenging” to work on individual basis

    The joint monitoring committee will continue to do its job and ensure production is capped at 1.2 mmbpd from OPEC. The non-OPEC participants will decide tomorrow how much of their 600,000 bpd cut will be maintained.

  • How OPEC lifted oil sector, by Kachikwu

    Minister of State for Petroleum Resources Dr. Ibe Kachikwu said yesterday that the oil and gas sector had witnessed positive transformation since the “Declaration of Cooperation” by the Organisation of Oil Exporting Countries (OPEC) and non-OPEC members.

    Dr. Kachikwu spoke to reporters on the sideline of the seventh OPEC International Seminar in Vienna, Austria, with the theme “Petroleum: Cooperation for a Sustainable Future.”

    The Declaration of Cooperation refers to the agreement by OPEC and several other non-OPEC producers to cut oil supplies from January, 2017.

    The aim was to lift the oil prices that had plunged from above 110 dollars per barrel in 2014 to below 30 dollars in 2016.

    A deal to extend the cut, which has boosted prices to around 70 dollars per barrel now, was agreed in November, 2017. The output cut agreement will however end in December.

    “The gain has been a lot. NNPC has done a wonderful job of stepping up at the right time to make sure our production volume increases, thereby allowing us to benefit greatly from the agreement.

    “I congratulate them (NNPC) because if we had all these cooperation and we have no volume, there will be a loss. So, the volume has been sustained between 1.9 million to 2.1 million barrels per day.

    “What that means is that we have been able to reap the benefit of the rise in price in order to finance our budget.

    “We have also been able to increase our foreign reserves and state governments are now able to pay salaries as at when due, largely due to the improvement in oil prices,” said Kachickwu.

    He urged the oil producers to be people conscious in their policy decisions knowing that their decisions have environmental and economic implications.

    “I think there is too much focus on tightness of market and short term responses.

    “I hope that doesn’t lead us into a very frenzied action plan that simply reverses the whole gains that we’ve had over the last few years.

    “Sustainability for third world countries is a different discussion altogether.

    “It is not about market fundamentals and rebalancing and cuts in production volumes, but about the environment, economy and impetus for development such as electricity for the people, environment clean ups and so on,” he said.

    Kachikwu also urged oil companies to cooperate with host communities and take seriously their Corporate Service Responsibilities.

  • OPEC set for stormy session over supply

    Iran says Venezuela and Iraq will join it in blocking a proposal to increase oil production that backed by Saudi Arabia and Russia when OPEC and its allies meet in Vienna this week.

    “Three OPEC founders are going to stop it,” Iran’s representative to the bloc Hossein Kazempour Ardebili said in comments to Bloomberg yesterday.

    “If the Kingdom of Saudi Arabia and Russia want to increase production, this requires unanimity. If the two want to act alone, that’s a breach of the cooperation agreement.”

    Iran’s comments show that OPEC members are set to clash when they meet later this week in Vienna to discuss the proposal to end global output cuts.

    The historic 24-nation pact has succeeded in its goals of balancing oil markets and lifting crude prices, and the two biggest producers want a relaxation of quotas as soon as next month. But while Saudi Arabia and Russia are pumping below capacity, many countries in OPEC including Iran and Venezuela would struggle to raise output even if their quotas were increased.

    OPEC and its allies could consider a production increase of as much as 1.5 million barrels a day, Russian Energy Minister Alexander Novak said on Thursday.

    That would be enough to offset the supply losses from Venezuela and Iran foreseen by the International Energy Agency. Saudi Arabia has been discussing different scenarios that would raise production by between 500,000 and 1 million barrels a day, according to people familiar with the matter.

    The alliance is also facing pressure from outside. U.S. President Donald Trump has continued to criticize OPEC on his Twitter account.

    Worried about the impact of gasoline prices on mid-term elections, the Trump administration is lobbying hard for a surge in production.

    “We call upon our brothers in OPEC and Russia that we do not need to appease Trump, who sanctions two OPEC founders and also Russia,” Kazempour Ardebili said. “We are sovereign nations driven by our own responsibilities and values. The whole world has to stand against these arrogant attitudes — and will.”

    U.S. sanctions will contribute to Iran and Venezuela potentially losing almost 30 percent of their oil output next year, requiring extra supplies from the group’s Gulf members, the International Energy Agency said last week.

    “No changes took place in market fundamentals, although” the U.S. Energy Information Administration and IEA “rushed to say differently,” Kazempour Ardebili said.

    The market is well-supplied, and OPEC should abide by its decision up to the end of the year,” he said. “I am confident many other OPEC members feel and act the same.”

  • Osinbajo urges investments outside OPEC

    Vice President Yemi Osinbajo yesterday sought for re-twinkling of the African Petroleum Producers’ Organisation (APPO) Fund in the same manner of the Organisation of Petroleum Exporting Countries (OPEC) fund in order to attract investments from non-member countries.

    Speaking at the extra-ordinary session of the organisation in Abuja, he said APPO Fund is already undergoing recapitalisation to fulfill its role.

    “The financial model of the fund, for example, may need some re-tweaking. It could be remodeled after similar institutions that had succeeded, like the OPEC Fund, where of course as you knowm non-OPEC members can begin to invest.

    “I would also want to talk about the APPO Fund For Technical Cooperation, which I am told is also undergoing recapitalisation to enable it better fulfill the role for which it was established. The financial model of the fund, for example, may need some re-tweaking. It could be remodeled after similar institutions that had succeeded, like the OPEC Fund, where of course as you knowm non-OPEC members can begin to invest,” he said.

    According to him, it is now time to liberalise the APPO for non member countries and private institutions to be able to invest in Africa.

    He insisted that the APPO fund ought to operate as an autonomous entity, independent perhaps, from the APPO secretariat, in the same way that OPEC Fund operates independently of OPEC itself.

    Osinbajo said: “If institutions similar to APPO and the APPO Fund have succeeded and are continuing to succeed in other parts of the world, then we have no reason, no excuse to fail as a continent.”

    The reminded the group that oil and gas that are the global economies driver of today might not sustain their relevance in future.

    Consequent upon this realisation, he said all serious economies all over have started planning for the world after oil.

  • U.S. urges OPEC to raise oil production by 1million

    The United States (U.S) has quietly asked Saudi Arabia and several other Organisation of Petroleum Exporting Countries (OPEC) nations to raise oil production by some 1 million bpd, it was gathered yesterday.

    While the U.S. government has often expressed opinion against OPEC’s oil price-fixing policies—including a recent comment by President Donald Trump, asking for a specific amount of oil production boost is a rare move, Bloomberg’s sources noted.

    It’s not clear how the U.S. request has been conveyed, and the White House declined to comment on conversations. Yet, a spokesperson for the U.S. National Security Council told Bloomberg: “We welcome any market-based action that increases energy access and fosters a healthy global economy.”

    Back in April, when oil prices hit a three-and-a-half year highs, Trump slammed OPEC for manipulating oil prices in a tweet saying that oil prices were “artificially very high” and “will not be accepted.”

    “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” President Trump said on Twitter on April 20.

    Oil prices then further jumped in May after the U.S. withdrew from the Iran nuclear deal and re-imposed sanctions on Iran that will kick in later this year.

    Concerns over a potential loss of some of Iran’s oil exports and the collapsing Venezuelan production supported an oil price rally for most of May, until reports emerged at the end of last month that OPEC’s largest producer Saudi Arabia and its key non-OPEC partner in the production cut deal, Russia, were discussing lifting the combined oil production of the countries from the pact by some 1 million bpd, potentially easing the cuts in response to supply concerns amid rising oil prices.

    OPEC, and Saudi Arabia specifically, have assured in recent weeks that they would address “consumer and market anxiety” if need be, as gasoline prices around the world reached their highest in four years.