OPEC

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 […]

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 […]

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. […]

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)

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…

OPEC’s December Cuts Are A Bullish Sign For Oil Markets

19 Jan 2017   OPEC

The Organization of Petroleum Exporting Countries (OPEC) cut oil production by 221,000 barrels per day in the last month of 2016, bringing the bloc’s total output to 33.08 million bpd by the end of December, according to the group’s latest report released on Wednesday. With domestic oil sectors just recovering from years of civil strife, Iraq and Libya upped their output to pay for the reconstruction of their countries as they regain former stability. For the month of December, Libya increased oil production from 577,000 barrels per day in November to 608,000 barrels per day, based on secondary sources. Iraq, who has contested the use of secondary source figures, produced 4.63 million barrels per day in December, up from 4.59 million barrels per day in November. Home to the second largest oil reserves in OPEC, Iraq has obligations to supermajor international oil companies, and must contend with production from […]

OPEC December Production Data

19 Jan 2017   OPEC

The new January OPEC Monthly Oil Market Report is out with crude only production numbers for December 2016. All charts are in thousand barrels per day. Indonesia has left OPEC so they are now down to 13 nations. The Indonesia historical data has been removed from the entire OPEC data. Therefore the December data does not reflect any drop due to Indonesia leaving OPEC. OPEC crude oil production dropped to 33,085,000 bpd in December. That was a drop of 220,900 bpd. However that was after the November production numbers were revised upward by 175,000 bpd. Therefore the drop was only 46,000 bpd from what was reported last month. Officially, the OPEC agreed to cut production by 1.2 million barrels per day. Those cuts are supposed to kick in in January. But I would not count on their January production numbers being down that much. OPEC’s December production represents an […]

OPEC sees smaller oil glut, upbeat on non-OPEC cut compliance

19 Jan 2017   OPEC

OPEC signaled a falling oil supply surplus in 2017 on Wednesday as the producer group’s output declines from a record high and outside producers show positive initial signs of complying with the first joint supply-reduction deal since 2001. The Organization of the Petroleum Exporting Countries, excluding Indonesia, pumped 33.085 million barrels per day (bpd) last month, according to figures OPEC collects from secondary sources, down 221,000 bpd from November, OPEC said in a monthly report. The November OPEC production figure was the highest since at least 2008. As well as reporting lower output from its own members, OPEC cut its forecast of supply in 2017 from non-member countries following pledges by Russia and other non-members to join OPEC in limiting output. OPEC […]

OPEC Chief Says ‘So Far, So Good’ on Deal to Cut Production

19 Jan 2017   OPEC

OPEC’s Barkindo: ‘So Far, So Good’ on Production Cut Deal Two weeks into OPEC’s first agreement to cut production in almost a decade, its top official’s assessment is “so far, so good.” Mohammed Barkindo on January 18. All 24 producers that agreed last month to reduce output are making “tremendous efforts” to do as they pledged, Mohammad Barkindo, secretary-general of the Organization of Petroleum Exporting Countries, said in a Bloomberg television interview in Davos, Switzerland. Still, at $55 a barrel crude remains “far away from the equilibrium price.” OPEC is cooperating with other nations in a bid to end a three-year oil surplus that’s weighed on prices and battered energy-dependent economies. Saudi Arabia and Russia, the two biggest producers involved in the accord, said this week they’re ahead of schedule with their supply cuts. The deal crafted in Vienna on Dec. […]

OPEC’s Production Cut: Who Will Cheat First?

19 Jan 2017   OPEC

There was one significant part of last year’s OPEC deal that was absent, and it may prove to be its undoing. Just weeks into the deal and days from a first inspection, there are rumours not everyone is playing by the rules. On the face of it, reports are positive. Output fell in December from a record high, the result of planned cuts and forced cuts- Nigeria was not able to export any Forcados crude after a pipeline was attacked. However, several reports raise concerns about Iraq reneging on the deal, with the Wall Street Journal talking of ‘an unexpected twist’: “instead of cutting its crude production by 4 percent as promised … Iraq instead plans to increase crude oil exports in January.” Investors.com quotes Omar Al-Ubaydli from George Mason University who believes that it’ll be the first to cheat as “Baghdad needs oil revenue to continue fighting the […]

OPEC sees weaker appetite for its crude as cut deal kicks in

19 Jan 2017   OPEC

OPEC expects demand for its own crude to fall this year but is mindful that the return of US shale could dent positive early signs on non-OPEC compliance with the landmark production restraint deal to rebalance the market, the exporters group said in its monthly oil market report Wednesday. In a sign that OPEC is serious about sticking to its recently instated output agreement, the producer group said it produced 33.085 million b/d in December, down 220,900 b/d from November, with Saudi Arabia leading the way by posting a sizeable fall. Related: Find more OPEC information in our news and analysis feature. In its monthly oil market report, OPEC projected that the call on its crude for 2017 would be 32.10 million b/d, just below the target of 32.5 million b/d that the organization is aiming to hold production to under the deal, though exemptions for Libya and Nigeria […]

OPEC output cuts under scrutiny as market tightens: IEA

19 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. REUTERS/Heinz-Peter Bader World oil markets are slowly tightening as demand rises while investors wait to see if production cuts agreed by OPEC and other producers will be implemented as promised, the International Energy Agency (IEA) said on Thursday. In its monthly oil market report, the IEA said output cuts announced by the Organization of the Petroleum Exporting Countries and 11 non-OPEC producers in November had “entered their probation period”. OPEC agreed in November to cut production by 1.2 million barrels per day (bpd) to 32.5 million bpd for the first six months of 2017, together with another 558,000 bpd in cuts from the likes of Russia, Oman and Mexico. “It is far too soon to see what level of compliance has been […]

Shale Rebound Will Cramp OPEC’s Style

19 Jan 2017   OPEC, Shale Oil

The Energy Department gave oil bulls a sobering reminder Tuesday: Shale oil production is rising strongly, particularly from the Permian Basin in western Texas and New Mexico. Putting an exclamation point on that resurgence, energy giant Exxon Mobil hours earlier announced a multibillion-dollar acquisition that doubled its exposure to that prolific oil patch. Is this making petrostates nervous less than a month into a coordinated push to revive oil prices by restricting supply? Speaking the same day at the World Economic…

Saudis, Kuwait, Algeria Cut More Than Pledged To OPEC

17 Jan 2017   OPEC

Saudi Arabia, Kuwait and Algeria may have cut their respective production below the levels they had promised in the OPEC deal, because all three are eager to show not only that they comply with the cuts, but also reduce supply more than pledged, according to JP Morgan Emerging Markets. “Arguably these states were crucial to the negotiations that forged the deal last year and are keen to demonstrate not just compliance but production cuts that go beyond the agreed level,” JP Morgan Emerging Markets said in research, as quoted by Azeri outlet Trend news agency. Saudi Arabia, in particular, has the fiscal capacity to cut output below the levels it had agreed with the cartel, the analysts said. Last week Saudi Arabia’s oil minister Khalid al-Falih said that the kingdom had cut production to below 10 million bpd , the lowest level in two years, and even lower than […]