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Total CEO Says OPEC Needs to Prolong Cuts to Eliminate Surplus

Total SA CEO Calls U.S. Shale Oil Industry Dynamic OPEC and Russia will need to prolong their six-month deal to cut oil output if they plan to trim the global inventory glut that has kept a lid on prices, said Total SA Chief Executive Officer Patrick Pouyanne. “If they want really to have an impact on the market, which means to have the inventories going down because inventories are quite high, it will have to be extended beyond May,” Pouyanne said Tuesday in a Bloomberg television interview in New York. “I’m convinced that they will do it.” Total’s Pouyanne discusses his outlook for the oil industry, OPEC production cuts and U.S. and Russia relations The CEO of the French oil and gas company added that he plans to keep lowering its so-called break-even point — the oil price at which cash […]

OPEC chief sees higher compliance with oil cut, says confidence returning

22 Feb 2017   OPEC

OPEC and outside producers including Russia will boost compliance with agreed oil output curbs in a bid to clear a supply glut that has weighed on prices, the group’s secretary general said on Tuesday. OPEC Secretary General Mohammad Barkindo also said he was “cautiously optimistic” on the outlook for the oil market, almost two months into the group’s supply cut deal with Russia and other producers. “Confidence has returned to this market,” he said at a news conference at Energy Institute’s IP Week, an annual gathering of the oil trading industry in London. “It’s work in progress, but the trend I think has commenced.” Oil prices rose after the comments, trading above $57 a barrel in London. Crude, while up from the low $30s a year ago, is […]

OPEC Chief Sees No U.S. Threat as Shale Production Rises

22 Feb 2017   OPEC, Shale Oil

OPEC’s most senior official said he would meet U.S. shale producers next month, as he sought to allay fears his cartel could be hurt by resurgent American output and the policies of President Donald Trump. The number of U.S. rigs has increased in recent weeks, encouraged by rising oil prices resulting from production cuts by the Organization of the Petroleum Exporting Countries. In addition, Mr. Trump has said he plans to reduce the…

Exclusive: OPEC could extend or deepen supply cut if oil glut persists – sources

17 Feb 2017   OPEC

OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said. The group, together with Russia and other non-OPEC oil producers, agreed late last year to cut output by 1.8 million barrels per day (bpd) to reduce a price-sapping glut. The deal took effect on Jan. 1 and lasts six months. For global petroleum inventories to fall by some 300 million barrels to the five-year average, producing countries must comply 100 percent with the supply accord and growth in demand for crude will have to stay healthy, the sources said. “If we have full commitment by everybody, inventories will go down. By sometime in the middle of this year, […]

OPEC cuts not doing the job, analyst says

17 Feb 2017   OPEC

Production cuts from the Organization of Petroleum Exporting Countries aren’t enough to cut global crude oil supplies, a market analyst said Thursday. OPEC members, and coordinating non-member states, last year agreed to hold production levels steady in an effort to erase a glut of oil on the market. An oversupplied market last year pushed oil to historic lows and OPEC’s agreement is aimed at restoring balance. Market watchers estimate a compliance rate of about 90 percent so far. Saudi Arabia is the largest contributor to overall cuts and secondary sources reported total OPEC production at 32.1 million barrels per day at the end of January, a decline of 2.7 percent from December and below the target range. Libya and Nigeria are exempt from […]

OPEC notes role as market stabilizer

16 Feb 2017   OPEC

The secretary-general of OPEC said market stability was a primary objective for the production group, but noted the importance of spare capacity. Mohammad Sansui Barkindo, the secretary-general of the Organization of Petroleum Exporting Countries, continued his visit with Saudi delegates this week. In Riyadh, he discussed market trajectory with Saudi Energy Minister Khalid al-Falih, who serves also as the president of the OPEC conference. During his meetings, Barkindo said Saudi Arabia is a key player and one of the primary movers behind a deal reached in November to erase the glut of oil on the market that dragged oil prices to historic lows last year. “OPEC’s goal is stability of the oil market,” he said in a statement . As its largest producer, Saudi Arabia […]

Can Saudi Arabia Carry OPEC Through Spring?

16 Feb 2017   OPEC, Saudi Arabia

Faced with budget strains amid low oil prices, Saudi Arabia ditched its pump-at-will policy and brought together the diverse group of OPEC nations to agree to production cuts late last year. Now the cartel’s de facto leader and largest producer is going the extra mile in reducing output, at least in January. The Saudis pledged the biggest cut in the November 30 deal , and last month went beyond the required amount to ensure a high rate of compliance. Initial estimates by the International Energy Agency (IEA) and OPEC itself show that the cartel’s early compliance to cuts is very high: more than 90 percent. The unexpectedly high rate is almost solely courtesy of Saudi Arabia. Bloomberg estimates — based on IEA and OPEC figures — show that just three out of 10 OPEC members that had promised cuts managed to reduce their output to target production levels in […]

Investor Honeymoon With OPEC Falters as Shale Drilling Booms

14 Feb 2017   OPEC, Prices

IEA Sees OPEC Achieving 90% Production Cut Compliance There are limits to investors’ love affair with OPEC. After unprecedented optimism that the Organization of Petroleum Exporting Countries will manage to ease a global supply glut, money managers reduced their bets on rising West Texas Intermediate prices for the first time in a month. While the group and other major exporters are pumping less crude, U.S. inventories and production are on the rise, and shale drillers keep adding rigs. The U.S. benchmark has traded mostly between $50 and $55 a barrel for the last two months. “There’s starting to be fatigue about the range we’ve been trading in,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by telephone. “It won’t be summer until we break out to the upside.” OPEC achieved the […]

Oil output cuts working quicker than expected, signals Opec

14 Feb 2017   OPEC

Steep Opec production cuts could ease an oil market surplus quicker than expected in 2017, the oil cartel signalled in its first output assessment since a deal to curb supplies and bolster prices came into effect. After more than two years of allowing market forces to balance supply and demand, Opec in November agreed to again influence prices that had crashed in a manner that was far more severe than anticipated. A year of talks and diplomatic wrangling between ministers of Opec’s resource-rich economies that had been battered by the oil downturn led to the first supply cut deal since the financial crisis. Opec agreed to reduce its output by around 1.2m barrels a day starting in 2017. A calculation using the 13-member group’s January production numbers, which were published on Monday, suggested curbs of around 1.1m b/d from Opec’s October baseline numbers. This implies more than 90 per cent compliance in the first month of the six-month deal to tackle excess inventories.

OPEC 310,000 Barrels Per Day Above Production Cut Goal

14 Feb 2017   OPEC

The new January OPEC Monthly Oil Market Report is out with crude only production numbers for January 2017. All charts are in thousand barrels per day. (Click to enlarge) OPEC crude oil production dropped to 32,139,000 bpd in January. November production was revised upward by 68,000 bpd while December production was revised downward by 56,000 bpd. So Peak OPEC production was in November 2016 instead of December as they had it last month. Officially OPEC agreed to cut production by 1.2 million barrels per day beginning in January. So OPEC missed their mark by 310,000 barrels per day. (Click to enlarge) OPEC’s December production represents an all time high for the cartel. (Click to enlarge) Algerian production was down by 41,700 bpd. This was a lot more than was expected. (Click to enlarge) Angola’s production was down 23,200 bpd in January. (Click to enlarge) Ecuador’s production dropped 16,700 bpd […]

Oil Producers Comply With OPEC Deal to Cut Output, but for How Long?

14 Feb 2017   OPEC

When OPEC and other major oil exporters agreed late last year to limit production as a way to bolster teetering prices, many saw it as a shaky deal by a spent force. That perception, though, has changed. And oil prices are up 20 percent since the agreement was reached.

Saudi Arabia Tells OPEC It Cut Oil Output by Most in 8 Years

14 Feb 2017   OPEC

No compatible source was found for this media. Tom Petrie Says Oil’s on Path to Successful Rebalancing Saudi Arabia told OPEC that it cut oil production by the most in more than eight years, going beyond its obligations under a deal to balance world markets. The kingdom reported that it reduced output by 717,600 barrels a day last month to 9.748 million a day, according to a monthly report from the Organization of Petroleum Exporting Countries. The group’s own analysts, who compile data from external sources, estimated that Saudi Arabia made a smaller 496,000 barrel-a-day cut — in line with last year’s supply agreement. “OPEC has done particularly well, they’ve surprised most analysts,” Spencer Welch, director of oil markets and downstream at IHS Markit, said in a Bloomberg radio interview before the report was published. “Saudi Arabia has made a particular effort to boost compliance.” OPEC and Russia are […]

Investor Honeymoon With OPEC Falters as Shale Drilling Booms

13 Feb 2017   OPEC

There are limits to investors’ love affair with OPEC. After unprecedented optimism that the Organization of Petroleum Exporting Countries will manage to ease a global supply glut, money managers reduced their bets on rising West Texas Intermediate prices for the first time in a month. While the group and other major exporters are pumping less crude, U.S. inventories and production are on the rise, and shale drillers keep adding rigs. The U.S. benchmark has traded mostly between $50 and $55 a barrel for the last two months. “There’s starting to be fatigue about the range we’ve been trading in,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by telephone. “It won’t be summer until we break out to the upside.” OPEC achieved the […]

IEA Tracks 40 Percent Compliance Rate For Non-OPEC Deal Participants

11 Feb 2017   IEA

Two anonymous OPEC sources say that eleven of the non-OPEC nations that are part of the oil output reduction deal struck at the end of November have only made 40 percent of promised cuts, according to Reuters . The report said the sources cited numbers found in data published by the International Energy Agency. The IEA’s numbers Friday morning showed that OPEC’s supply-cut deal achieved a greater level of success—a record internal initial compliance rate of 90 percent . The Organization of Petroleum Exporting Countries (OPEC) said its members had made 92 percent of expected cuts, data released the same day showed. OPEC, Russia and other oil producers aimed to curb output by 1.8 million barrels per day during the first six months of the new year in an effort to rid global markets of a price-crashing supply glut. Part of the issue with the low compliance from outside […]

IEA says record OPEC cut compliance helps oil market rebalance

10 Feb 2017   IEA

A worker checks the valves at Al-Sheiba oil refinery in the southern Iraq city of Basra, January 26, 2016. REUTERS/Essam Al-Sudani/File Photo Global oil output plunged in January as OPEC and non-OPEC producers curbed supply to accelerate a market rebalancing following one of the largest oil gluts in a generation, the International Energy Agency said on Friday. Oil supplies fell by around 1.5 million barrels per day last month, including by 1 million bpd for OPEC, leading to record initial compliance of 90 percent with a six-month output-cut deal reached in December by big producers to boost prices. “Some producers, notably Saudi Arabia, (are) appearing to cut by more than required. This first cut is certainly one of the deepest in the history of OPEC output cut initiatives,” the IEA, which advises industrial nations on energy policy, said. The Paris-based IEA said if the January level of compliance were […]

International Energy Agency Oil Market Report

10 Feb 2017   IEA
  • Supported by strong 4Q16 numbers,the estimate for global oil demand growth for 2016 was revised up for the third consecutive month to 1.6 mb/d. Although still forecast to decelerate in 2017 to 1.4 mb/d, recent improvements in industrial activity are providing support.
  • Global oil supplies plunged nearly 1.5 mb/d in January, with both OPEC and non-OPEC countries producing less. At 96.4 mb/d, world oil production stood 730 kb/d below a year ago, with OPEC posting its first year-on-year (y-o-y) decline since early 2015.
  • OPEC crude production fell by 1 mb/d to 32.06 mb/d in January, leading to record initial compliance of 90% with the output agreement. Some producers, including Saudi Arabia, cut supply by more than required. Lower production was partly offset by higher flows from Libya and Nigeria, which are exempt from cuts.
  • After falling by 0.8 mb/d last year, non-OPEC output will grow by 0.4 mb/d in 2017.Growth is mainly in the Americas, where higher prices are fuelling increased investments in US LTO activity and long lead-time projects are coming on stream in Brazil and Canada.
  • OECD total oil stocks fell nearly 800 kb/d in 4Q16, the largest fall in three years.End-December inventories were below 3 000 mb for the first time since December 2015. Stocks continued to build in China and other emerging economies and volumes of oil at sea also increased.
  • Front-month Brent futures gained by a modest $0.59/bbl to $55.51/bbl in January as traders awaited news of OPEC cuts. The Brent contango narrowed, while sour benchmark Dubai continued to rise versus Brent and WTI. Gasoline, LPG and naphtha cracks increased.
  • 4Q16 refinery runs were stronger on more solid product demand, with runs up 830 kb/d y-o-y, after modest growth of 160 kb/d in 3Q16. This brought 2016 average throughput growth to 465 kb/d. 1Q17 refinery runs are forecast to grow 200 kb/d y-o-y.

Oil Jumps as IEA Sees Record OPEC Cuts Compliance, Rising Demand

10 Feb 2017   IEA, OPEC

Oil jumped as the International Energy Agency said OPEC had achieved record initial compliance of 90 percent with their cuts agreement, while demand grew faster than expected. Futures gained as much as 1.1 percent in New York. In the first month of the Organization of Petroleum Exporting Countries’ agreement, key member Saudi Arabia reduced production by even more than it had committed , while higher demand is aiding the group’s bid to re-balance world markets, the IEA said. Oil has fluctuated above $50 a barrel since a deal to trim output between OPEC and 11 other nations took effect on Jan. 1. U.S. producers are taking advantage of higher prices by increasing drilling activity and boosting daily output to the highest level since April, a dynamic the IEA said is capping prices in the mid-$50s. “The key question for the oil market is how long OPEC can sustain this […]

IEA Says OPEC Reaches Record Compliance With Agreed Cuts

10 Feb 2017   IEA, OPEC

OPEC members have reached a record compliance of 90% with their agreed output cuts, the International Energy Agency said Friday. The Organization of the Petroleum Exporting Countries on Nov. 30 agreed to cut its production from January by 1.2 million barrels a day to end a persistent oil glut. In December, Russia and other producers outside the group committed to take 558,000 b/d out of the market. In its closely watched…

OPEC Ministers Say the Market Might Need More Oil Cuts

9 Feb 2017   OPEC

Oil Declines on Projected U.S. Crude Stockpiles OPEC and other major crude-producing nations may need to extend output cuts into the second half of the year to re-balance the market, oil ministers for Iran and fellow group member Qatar said. Global oil supplies have decreased as the Organization of Petroleum Exporting Countries and producers outside the group comply with a six-month deal to curb output that took effect on Jan. 1, Qatar’s Energy Minister Mohammed Al Sada said Wednesday at a news briefing in Doha. “It’s too early to make a judgement,” he said, adding that markets may re-balance in the third quarter. “We kept it open to reconsider the rollover, and rollover is an option if needed,” Al Sada told Bloomberg TV in Qatar’s capital. Mohammed Al-Sada Photographer: Akos Stiller/Bloomberg In principle, OPEC will have to cut output in the […]

Some OPEC members bucking trend

9 Feb 2017   OPEC

An industry survey finds some OPEC members moving against the grain despite near-full compliance with managed production decline agreement. File photo by A.J. Sisco/UPI Feb. 8 (UPI) — Members of OPEC exempt from a production agreement, and those producers who wanted such a break, are bucking rival trends, an industry survey finds. Members of the Organization of Petroleum Exporting Countries agreed to a collective production ceiling of 32.5 million barrels per day as of January. Some industry analysts continue to speculate over the level of compliance, however. Iraq, one of OPEC’s larger contributors, produced around 4.48 million barrels of oil per day on average in January, a survey from S&P Global Platts found. The country lobbied for an exemption from the OPEC agreement, citing a need to keep the revenue stream flowing as it battled against the Islamic State terrorist group. Baghdad acquiesced, however, to a ceiling of 4.35 […]

Are These OPEC Members Sabotaging The Output Deal?

9 Feb 2017   OPEC

OPEC provide a shot in the arm for oil prices this week when S&P Global Platts reported a much higher than expected compliance rate for the month of June. So far, OPEC has achieved 91 percent of its promised production cuts, impressing many oil watchers who expected mutual antipathy and mistrust to get in the way of cooperation. But the success of the deal could be undermined by a few members within OPEC that are not part of the deal. Libya and Nigeria were given exemptions, due to the sizable portion of oil production capacity sidelined because of war, sabotage and political strife in both countries. There are still very large question marks over the stability of these two countries, but it is not impossible that some of the obstacles start to clear and more production comes back online. Libya produced just under 700,000 bpd in January, a remarkable […]

IEA does not foresee oil demand peaking soon, Birol says

8 Feb 2017   IEA, Oil Supply

The International Energy Agency (IEA) does not expects oil demand to peak any time soon due to rising consumption in developing economies, Director Fatih Birol said on Monday. Birol also warned that oil markets could enter a period of high volatility unless companies develop new projects after two years of sharp drops in investments sparked by low oil prices. “We do not see in the near and medium terms oil products can be substituted by other fuels. More than one third of growth comes from trucks in developing Asia… We do not subscribe to oil demand peaking anytime soon,” Birol said at the GE Oil and Gas annual meeting in Florence, Italy. “If there are no major new major projects this year, it will be very […]

OPEC Jan crude oil output 32.16 million b/d, down 690,000 b/d from Dec: Platts survey

7 Feb 2017   OPEC

The 10 OPEC members obligated to reduce oil output under the landmark agreement signed late last year achieved 91% of their required cuts in January , with their production falling 1.14 million b/d from October levels, according to an S&P Global Platts survey released Monday. Those cuts were, however, offset partly by output gains in Libya and Nigeria, which are exempt from the accord, and Iran, which is allowed to increase its production slightly. Related: Find more OPEC information in our news and analysis feature. In all, OPEC’s 13 members — not including Indonesia, which suspended its membership at the group’s last meeting — produced 32.16 million b/d in January, a 690,000 b/d decline from December, the Platts survey showed. Article continues below… Platts London Oil & Energy Forum February 20, 2017 | May Fair Hotel, London With sessions on the global outlook for crude oil, middle distillates and […]

Investors Have Never Loved OPEC So Much as It Sticks to Cuts

6 Feb 2017   OPEC

Investors are betting big that OPEC’s cuts are real. Money managers are the most bullish ever on West Texas Intermediate crude for a second week as signs show OPEC and other nations are slashing production. The group cut supply by 840,000 barrels a day last month, according to a Bloomberg survey, and Russia, the largest of the non-members taking part in the deal, reduced output by 117,000 barrels a day. WTI has traded above $50 a barrel for the past seven weeks, encouraging Wall Street investors to fund more drilling in U.S. shale fields. “The smart money is starting to realize that the OPEC production cuts are real,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, said by telephone on Friday. “The oil story is beginning to look like the bust-end of the cycle is over.” Crude has risen 19 percent since the Organization of Petroleum […]

OPEC Acing a Challenging Oil Market Test So Far

2 Feb 2017   OPEC

With the first month of the Organization of the Petroleum Exporting Countries’ deal now behind us, official production and export numbers are hard to find. The early results, though, are encouraging for oil bulls. Industry-watcher JBC Energy estimates that compliance within OPEC itself is around 88% on a net basis. The cartel is infamous for cheating on production quotas, making even 50% to 60% compliance in the past a passing grade. The estimated 1 million barrels actually curtailed would be enough for an A-plus if…

Iraq complies with scale, if not absolute level, of OPEC cut: sources, data

2 Feb 2017   OPEC

Iraq significantly reduced oil output in January, according to industry sources and export data on Wednesday, but has yet to reach levels expected by OPEC from its second largest producer. A Reuters survey on Tuesday found Iraq lowered output by 200,000 barrels per day (bpd) compared with December – almost all the 210,000 bpd reduction it was supposed to make under the deal by the Organization of the Petroleum Exporting Countries. The finding that output fell at all was a surprise to some in the market. Baghdad’s initial request to be exempt from the OPEC agreement, plus loading programs pointing to continued high Iraqi exports, had led to scepticism it would cut. But Iraqi officials have been stressing that reductions – both […]

Russia Claims Global Oil Output Down By 1.4M Bpd

2 Feb 2017   OPEC, Russia

Russian Energy Minister Alexander Novak has announced that global oil output was cut by 1.4 million barrels per day last month, in the aftermath of the deal between OPEC and non-OPEC countries to rebalance the market. Novak made his announcement during a meeting with Russian President Vladimir Putin, referring to preliminary data without explaining the sources of the data. If Novak’s figures are correct, it would mean that OPEC and non-OPEC countries are close to meeting their goal of cutting a combined 1.8 million barrels per day by the first half of this year. At a compliance meeting in Vienna earlier in January, Novak said that Russia had reduced its oil production by some 100,000 barrels a day. Russia intends to cut its oil production by 200,000 barrels per day by the end of the first quarter and afterwards 300,000 barrels per day. “Some countries have cut more than […]

OPEC Convinces Investors That Its Oil Output Cuts Are Real

31 Jan 2017   OPEC

OPEC appears to have persuaded investors that it’s making good on promised production cuts. Money managers are the most optimistic on West Texas Intermediate oil prices in at least a decade as the Organization of Petroleum Exporting Countries and other producers reduce crude output. Saudi Arabia has said more than 80 percent of the targeted reduction of 1.8 million barrels a day has been implemented. Oil shipments from OPEC are plunging this month, according to tanker-tracker Petro-Logistics SA . “All the signs are pointing to a pretty significant OPEC cut,” Mike Wittner, head of commodities research at Societe Generale SA in New York, said by telephone. “Until this week we were only getting data from the producers, now the tanker traffic seems to be supporting this view.” OPEC will reduce supply by 900,000 barrels a day in January, the first month of the accord’s implementation, said the Geneva-based Petro-Logistics. […]

IEA does not foresee oil demand peaking soon, Birol says

30 Jan 2017   IEA

The International Energy Agency (IEA) does not expects oil demand to peak any time soon due to rising consumption in developing economies, Director Fatih Birol said on Monday. Birol also warned that oil markets could enter a period of high volatility unless companies develop new projects after two years of sharp drops in investments sparked by low oil prices. “We do not see in the near and medium terms oil products can be substituted by other fuels. More than one third of growth comes from trucks in developing Asia… We do not subscribe to oil demand peaking anytime soon,” Birol said at the GE Oil and Gas annual meeting in Florence, Italy. “If there are no major new major projects this year, it will be very […]

OPEC January oil output shows high compliance with supply cut deal: Petro-Logistics

30 Jan 2017   OPEC

OPEC oil output is set to fall by 900,000 barrels per day (bpd) this month, a company that tracks OPEC supply said on Friday, pointing to a strong start by the exporter group in implementing a supply cut deal. The Organization of the Petroleum Exporting Countries is cutting its output by 1.2 million bpd from Jan. 1 — its first such deal since 2008 — to prop up oil prices. “OPEC supply is on track to decrease by 900,000 bpd in January, suggesting a high level of compliance thus far into the production curtailment agreement,” Daniel Gerber, chief executive of Petro-Logistics, said in an email. Petro-Logistics (www.petro-logistics.com) is among a number of consultants that estimate OPEC supply. OPEC itself has yet to publish a figure for its January output. (Reporting by Alex Lawler; Editing by David Goodman)

OPEC May Be Powerless To Stop Lower For Longer

30 Jan 2017   OPEC

Just a few months after oil prices began to crash from its US$100 level in 2014, BP’s chief executive Bob Dudley warned the industry that it needed “to prepare for lower for longer ”. At the beginning of 2017 – with oil prices relatively stable at over US$50 for a couple of months now – the UK oil supermajor said it in its 2017 Energy Outlook edition that oil resources are abundant, and those that are known today dwarf the expected global consumption of oil out to 2050 and beyond. In BP’s predictions for a future world in the next 20-30 years, the abundance of potential oil reserves and supply may lead to low-cost producers pumping “ever-increasing amounts of that oil and higher-cost producers getting gradually crowded out” , group chief economist Spencer Dale said . This abundance of oil resources contrasts with expectations of slowing growth of oil […]

OPEC Convinces Investors That Its Oil Output Cuts Are Real

30 Jan 2017   OPEC

OPEC appears to have persuaded investors that it’s making good on promised production cuts. Money managers are the most optimistic on West Texas Intermediate oil prices in at least a decade as the Organization of Petroleum Exporting Countries and other producers reduce crude output. Saudi Arabia has said more than 80 percent of the targeted reduction of 1.8 million barrels a day has been implemented. Oil shipments from OPEC are plunging this month, according to tanker-tracker Petro-Logistics SA . “All the signs are pointing to a pretty significant OPEC cut,” Mike Wittner, head of commodities research at Societe Generale SA in New York, said by telephone. “Until this week we were only getting data from the producers, now the tanker traffic seems to be supporting this view.” OPEC will reduce supply by 900,000 barrels a day in January, the first month of the accord’s implementation, said the Geneva-based Petro-Logistics. […]

Oil Shipments Show That OPEC Is Sticking to Its Cuts

28 Jan 2017   OPEC

No compatible source was found for this media. Are Producers Complying With OPEC’s Output Cuts? Oil supplies from OPEC are plunging this month as the group implements production cuts aimed at erasing a global surplus, according to tanker-tracker Petro-Logistics SA . The Organization of Petroleum Exporting Countries will reduce supply by 900,000 barrels a day in January, the first month of the accord’s implementation, said the Geneva-based consultant. That’s equivalent to about 75 percent of the cut that the producer group agreed. Eleven non-members led by Russia are to curb their output in support. The data suggest “a high level of compliance thus far into the production curtailment agreement,” said Daniel Gerber, chief executive officer of Petro-Logistics, which has monitored tanker movements for more than three decades. The estimates are one of the first outside assessments of OPEC’s progress. Adherence to the accord is “great,” Saudi Arabia Energy Minister […]

Baker Hughes Is Busy Drilling in Middle East Even as OPEC Cuts

27 Jan 2017   Middle East, OPEC

OPEC production cuts haven’t slowed the search for more oil in the Middle East. Baker Hughes Inc., which will soon be the world’s second-largest oil services provider, called the Middle East a positive environment for expected work in the first half this year. “There’s a bit of a disconnect between the OPEC cuts that were announced and what we’re forecasting at least for the next 6 months in terms of activity,” Martin Craighead, chief executive officer at Baker Hughes, told analysts and investors Thursday on a conference call. “We see no pullback that would correlate to the announcement on a production cut. We still expect it to be relatively steady. A couple pockets of the more midsize to smaller players in the Middle East are actually going to increase.” The healthy outlook for drilling in the region underscores the temporary nature of the output cuts, and the potential for […]

Russia Makes A Move On Asian Oil Markets As OPEC Cuts

27 Jan 2017   OPEC, Russia

Oil prices have been struggling to rise beyond the low $50s per barrel. Not helped by news this week that Libya’s production has hit a 3-year high at 715,000 barrels per day — and is expected to rise to 1.25 million b/d by end-2017. And the crude market may have an even bigger problem looming. Russia. New data Monday showed that Russian oil producers achieved a major milestone in 2016. Becoming the largest supplier of crude to energy-hungry China. That came as Russian oil shipments to China rose 24% as compared to 2015 levels — to an average 1.05 million barrels per day for the year. Inching Russia ahead of go-to supplier Saudi Arabia, which saw its exports to China average 1.02 million b/d in 2016. That shift is happening as Saudi producers reportedly reigned in output under the OPEC production cuts agreed in late 2016. A move that […]

Oil Minister: Iraq Has Already Cut 180,000 Bpd Under OPEC Deal

24 Jan 2017   Iraq, OPEC

Amid speculation whether Iraq would really play along with the OPEC production cuts, the oil minister of the cartel’s no.2 producer said on Monday that the country had already cut 180,000 bpd off its production, and planned to reduce output by another 30,000 bpd by the end of January. Speaking at an industry event in London, Iraq’s oil minister Jabar Ali al-Luaibi said that Iraq had cut production from a level of 4.75 million bpd, Reuters reports, but this was not the reference basket that OPEC used to determine who should cut what under the production cut agreement signed last November. Under the November 30 OPEC deal, Iraq had promised to cut 210,000 bpd from a reference production level of 4.561 million bpd —for a production target of 4.351 bpd. Before signing the agreement, OPEC’s second-biggest producer had pleaded exemption on the grounds that it needs revenues to fight […]

Analysis: OPEC/non-OPEC claim compliance but questions linger

23 Jan 2017   OPEC

OPEC and non-OPEC producers left their meeting in Vienna Sunday claiming 100% commitment with plans to cut output, but market watchers will have to wait a little longer for hard evidence of full compliance. There was certainly convincing rhetoric from the oil ministers and there have been signs of significant cuts, but the market must now determine fact from fiction, given the expected natural declines from some countries, planned maintenance and how output is responding from exempt producers like Nigeria and Libya. Saudi oil minister Khalid al-Falih was “positive” that non-OPEC producers were taking part in the cuts, while Russia’s Alexander Novak said his expectations have been “exceeded”. But beyond the ministers’ platitudes, the monitoring committee — made up of representatives from Algeria, Kuwait, Oman, Russia and Venezuela — still has little to work with. Moreover, minister claims that the market could rebalance within the first six months have […]

OPEC Shrugs Off Threat of U.S. Cutting Oil Imports

23 Jan 2017   OPEC

OPEC’s two biggest suppliers to the U.S. shrugged off a vow by President Donald Trump to end dependence on the group’s oil, saying the world’s biggest economy would continue to need crude from abroad. The U.S. is “closely integrated in the global energy market,” Saudi Arabia’s Energy and Industry Minister Khalid Al-Falih said, while his Venezuelan counterpart Nelson Martinez said he expects his country’s crude exports to the world’s top consumer to remain stable. “The positions that the U.S. and Saudi Arabia take in global energy are very important for global economic stability,” Al-Falih said Sunday at a meeting of producing countries in Vienna. He added that Saudi Arabia was looking forward to working with the Trump administration. Just after his inauguration on Friday, Trump said he was “committed to achieving energy independence from the OPEC cartel and any nations hostile to our interests,” by exploiting “vast untapped domestic […]

OPEC, non-OPEC producers meet to discuss compliance with oil cut deal

23 Jan 2017   OPEC

A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen before a news conference at OPEC’s headquarters in Vienna, Austria December 10, 2016. A committee of OPEC and non-OPEC countries responsible for monitoring compliance with a global agreement to reduce oil output is set to meet for the first time in Vienna on Sunday. The committee is expected to discuss how to best monitor compliance with the deal reached late last year as well as what level of compliance would be acceptable, Kuwaiti oil minister Essam Al-Marzouq said in Vienna on Saturday. Kuwait chairs the five-member committee which also includes Algeria, Venezuela, Russia and Oman. Asked about compliance with the deal so far, Saudi energy minister Khalid al-Falih said it had been “very good”. Russian Energy Minister Alexander Novak on Sunday also said he was satisfied with the level of compliance shown. The Organization of […]

OPEC and Friends Agree on Way to Monitor Oil Cut to End Glut

23 Jan 2017   OPEC

Compliance is great — it’s been really fantastic,” Al-Falih said Sunday. “Based on everything I know, I think it’s been one of the best agreements we’ve had for a long time.” OPEC and other oil producers agreed on a way to monitor their compliance with last month’s historic supply deal, putting global markets on track to re-balance after more than two years of oversupply. The countries have already cut oil supply by 1.5 million barrels a day, more than 80 percent of their collective target, since the deal took effect on Jan. 1, Saudi Arabia’s Minister of Energy and Industry Khalid Al-Falih told reporters in Vienna. “Compliance is great — it’s been really fantastic,” Al-Falih said Sunday. “Based on everything I know, I think it’s been one of the best agreements we’ve had for a long time.” Saudi Arabia, Kuwait, Qatar, Algeria and Venezuela met counterparts from non-OPEC nations […]

Has OPEC Seriously Underestimated U.S. Shale Dynamics?

21 Jan 2017   OPEC, Prices, Shale Oil

Oil was flat this week as rising U.S. shale production and a bearish inventory report continued to put pressure on WTI and Brent. Crude oil inventories rose by another 2.4 million barrels, gasoline stocks jumped by nearly 6 million barrels, and upstream production figures provided further evidence that U.S. shale output is coming back is already here in the form of a huge rig count increase . Oil price to fall below $50 if OPEC fails to deliver. A new CNBC survey of energy forecasters finds that experts believe that oil prices will fall from today’s levels if the […]

OPEC, Russia Meet in Vienna for First Check on Oil-Cuts Progress

21 Jan 2017   OPEC

No compatible source was found for this media. OPEC’s Barkindo: ‘So Far, So Good’ on Production Cut Deal Representatives of OPEC and several other major oil producers will start arriving in Vienna on Friday for their first meeting to monitor compliance with an agreement to cut output. Ministers from Saudi Arabia, Kuwait, Algeria and Venezuela will meet counterparts from non-OPEC nations Russia and Oman to figure out ways to verify that the 24 signatories to the historic deal are following through on their pledge to remove a combined 1.8 million barrels a day of supply from the market for six months. They intend to prove the group is serious about finally eliminating a three-year crude oversupply and dispel skepticism stemming from previous unfulfilled promises. International oil prices rose to an 18-month high of more than $58 a barrel after the Organization of Petroleum Exporting Countries and several non-members agreed […]

Saudi Arabia’s Falih says 1.5 million barrels/day cut from market in January

21 Jan 2017   Oil Supply, OPEC

Saudi Arabian Energy Minister Khalid al-Falih said on Friday that 1.5 million of an agreed upon 1.8 million barrels per day (bpd) of oil had been taken out of the market in January. Falih estimated the growth of shale oil in 2017 at 200,000 to 300,000 barrels per day, he told Al Arabiya television. An estimate of 500,000 barrels of shale oil by the head of the International Energy Agency (IEA) were exaggerated, Falih said. (Reporting by Maha El Dahan and Mohamed el Sherif)

International Energy Agency Monthly Oil Market Report

20 Jan 2017   IEA
  • The global demand outlook for 2016 has been raised following the release of robust preliminary 4Q16 numbers. Colder weather in northern Europe provided impetus as did rapid industrially-driven Asian growth. Global oil demand growth for 2016 is now expected to be 1.5 mb/d, slowing to 1.3 mb/d in 2017 as product prices potentially rise.
  • Global oil supplies fell by more than 0.6 mb/d in December, to 97.6 mb/d on lower OPEC and non-OPEC output. For 2016, world supply was up 0.3 mb/d from the previous year as record OPEC output more than offset a 0.9 mb/d decline in non-OPEC.
  • OPEC crude production, now excluding Indonesia, fell 320 kb/d from record rates to 33.09 mb/d in December after lower Saudi output and disruptions in Nigeria curbed supply. Early indications suggest a deeper OPEC reduction may be under way for January, as Saudi Arabia and its neighbours enforce supply cuts.
  • Non-OPEC supplies are forecast to grow by 385 kb/d in 2017, as higher prices in the wake of an anticipated coordinated supply cut stimulate increased investment in the US. Recovering LTO production underpins a 320 kb/d gain in total US output this year.
  • OECD industry stocks fell across crude and oil products in November, marking a fourth consecutive monthly decline. Taking into account preliminary data for December, stocks are 82 mb below July’s historical peak, even if for now they remain above the symbolic 3 000 mb level.
  • Oil prices rose in early December and stayed within a $53-57/bbl range thereafter. Dubai, after weakening initially, gained versus other benchmarks due to lower expected OPEC output, opening the arbitrage to Asia for Brent and WTI-linked crudes. Fuel oil was a strong performer due to supply shortages.
  • Higher estimates for 4Q16 global refinery crude throughput – up by 160 kb/d – were partly responsible for a 260 kb/d downward revision for 1Q17. Our analysis of refined product stocks movements shows a 4Q16 build in the OECD, with the overhang in non-OECD implied refined product inventories persisting.

OPEC Faces Headwinds From Rising Non-OPEC Production

20 Jan 2017   OPEC

OPEC is facing headwinds with rising production from rivals, the International Energy Agency said Thursday, the latest warning that OPEC’s efforts to take barrels out of the market could backfire. The Organization of the Petroleum Exporting Countries—the 13-nation oil cartel that controls over a third of global crude production—promised to…

OPEC Head: Oil Inventories Already Dropping From High Levels

20 Jan 2017   OPEC

Global oil stocks have already started falling, but they need to drop by another 270 million barrels so that OPEC can say that the oil market is coming to balance, OPEC Secretary General Mohammed Barkindo told Reuters on the sidelines of the World Economic Forum in Davos. OPEC’s main goal is to speed up the inventory drawdown, and it will continue to focus on bringing the level of drawdown near a five-year industry average, the organization’s chief said. “Stocks have already come down to below 3 billion barrels in OECD commercial stocks. The delta now is around 270 million,” Barkindo told Reuters. OPEC’s latest Monthly Oil Market Report published on Wednesday said that total OECD commercial stocks fell in November 2016 to stand at 2.993 billion barrels, some 271 million barrels above the latest five-year average. The drop in oversupply would help create an “equilibrium oil price”, according to […]

Oil Settles Higher After IEA Says OPEC Cuts on Track

20 Jan 2017   IEA, OPEC

Oil prices rose Thursday after the International Energy Agency’s monthly report suggested global oversupply is easing. The Paris-based IEA said production from the Organization of the Petroleum Exporting Countries was falling and inventories in big consumer countries have been draining. Bulls highlighted this information in pushing for higher prices, but the IEA warned that gains could be offset by expansion outside of OPEC,…

OPEC Seeks to Quiet Doubts on Supply Cuts as Rally Falters

20 Jan 2017   OPEC

When OPEC and Russia meet this weekend to gauge progress on their oil-supply deal, they’ll be trying to dispel the shadow of previous unfulfilled promises. Oil prices rose 20 percent in the month after OPEC agreed to cut output, reaching $54.06 a barrel in New York on Dec. 28. Since then, they’ve slipped almost 5 percent as traders, with one eye on rising U.S. shale production , await proof that OPEC and other producers will live up to their deal. They recall how Russia broke its pledge during cutbacks in 2008, while some members of the producers group failed to fully implement the agreement. The solution: The dealmakers have created a panel to verify the cuts, a five-nation group with both OPEC and non-OPEC members that will meet Jan. 22 in Vienna. While some see this as an impressive indication of intent in the midst of a two-year price […]

OPEC Seeks to Quiet Doubts on Supply Cuts as Rally Falters

19 Jan 2017   OPEC

When OPEC and Russia meet this weekend to gauge progress on their oil-supply deal, they’ll be trying to dispel the shadow of previous unfulfilled promises. Oil prices rose 20 percent in the month after OPEC agreed to cut output, reaching $54.06 a barrel in New York on Dec. 28. Since then, they’ve slipped almost 5 percent as traders, with one eye on rising U.S. shale production , await proof that OPEC and other producers will live up to their deal. They recall how Russia broke its pledge during cutbacks in 2008, while some members of the producers group failed to fully implement the agreement. The solution: The dealmakers have created a panel to verify the cuts, a five-nation group with both OPEC and non-OPEC members that will meet Jan. 22 in Vienna. While some see this as an impressive indication of intent in the midst of a two-year price […]

OPEC Faces Headwinds From Rising Non-OPEC Production

19 Jan 2017   OPEC

OPEC is facing headwinds with rising production from rivals, the International Energy Agency said Thursday, the latest warning that OPEC’s efforts to take barrels out of the market could backfire. The Organization of the Petroleum Exporting Countries—the 13-nation oil cartel that controls over a third of global crude production—promised to…