Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content
  • CRYPTO REWARDS!

    Full endorsement on this opportunity - but it's limited, so get in while you can!

Oil rises 1% on settlement amid fears of supply shortages


Recommended Posts

  • yota691 changed the title to The United States becomes a net exporter of oil and its derivatives for the first time in 45 years

The United States becomes a net exporter of oil and its derivatives for the first time in 45 years

The United States becomes a net exporter of oil and its derivatives for the first time in 45 years

07 December 2018 12:02 ص
Direct : US jumped oil exports to a record level to exceed imports for the first time during the past week, the United States to become a net exporter of oil and its derivatives for the first time in 45 years.

According to the US Energy Information Administration on Thursday, US oil exports reached 3.2 million barrels during the week ending Nov. 30, along with about 5.8 million barrels of gasoline, diesel, jet fuel and other products.

These exports exceeded combined imports of 8.8 million barrels per day last week, making the United States a net exporter of oil and its derivatives for the first time since 1973.

This comes as high oil production in the United States and the abolition of the ban on exports of crude as well as advanced investments in refining.

Over the past week, US crude production has stabilized at 11.700 million bpd, the highest level ever.

 
  • Upvote 1
Link to comment
Share on other sites

Oil minister from Vienna: confident of agreement on oil production in OPEC

09:23 - 07/12/2018

 
image
 
 

BAGHDAD (Reuters) - 
Oil Minister Thamir al-Ghadhban expressed his confidence on Friday that a deal could be reached on OPEC's oil production. 
"We are still discussing among ourselves, tomorrow we will discuss with our partners outside the (OPEC), and I am confident that the possibility of reaching an agreement," said Ghadban, told the Russian news agency "Sputnik". 
"I am of course going to participate," he said at a 
meeting of the ministerial follow-up committee in Vienna on December 5 to reduce oil production in the first half of 2019, The 
issue was discussed at the Organization of the Petroleum Exporting Countries (OPEC) meeting on December 6 and will be followed by a ministerial meeting of the 25 OPEC member countries.
International oil prices fell on Thursday morning, with cautious sentiment as European and Asian financial markets fell in anticipation of the meeting of the world's top crude exporters.

  • Upvote 2
Link to comment
Share on other sites

Lower oil prices with OPEC linking production cuts to Russia's decision

11:20 - 07/12/2018

 
image
 
 

Mawazine News 
Oil prices fell on Friday, driven by OPEC postponing a final decision on production cuts while waiting for support from Russia, a heavyweight producer, reportedly not wanting to cut output by more than 150,000 barrels per day. 
Brent crude futures fell below $ 60 a barrel in early trade, then traded at $ 59.49 a barrel by 0643 GMT, down 57 cents, or 1 percent, from the previous close. 
US WTI crude futures were $ 50.98 a barrel, down 52 cents, or 1 percent.
The price declines came after crude fell about 3 percent in the previous session, with the Organization of the Petroleum Exporting Countries ending a meeting at its headquarters in Vienna, Austria, on Thursday without announcing a decision to cut supplies, instead to discuss the issue on Friday. 
The Russian news agency quoted a source as saying on Friday that Russia wants to reduce its oil production to a maximum of 150 thousand barrels per day in the first three months of 2019. 
Analysts expect OPEC to reduce oil production more than Russia. 
Oil producers have been hit by a 30 percent decline in crude prices since October as supply surged as demand prospects dimmed amid a global economic slowdown.
Oil production from the world's top producers, OPEC, Russia and the United States, has increased by 3.3 million bpd since the end of 2017 to 56.38 million barrels per day, accounting for about 60 percent of world consumption. 
The increase was equivalent to the production of the UAE, a major member of OPEC, ending June 29

  • Upvote 1
Link to comment
Share on other sites

  • yota691 changed the title to America exports oil in unprecedented quantities in its history
Date of release: 2018/12/7 13:43  218 times read
America exports oil in unprecedented quantities in its history
For the first time in nearly 75 years, America exported more oil than it imported from November 26 to December 2, according to the Bloomberg business news agency.
"The daily difference between US exports and imports of fuel last week was 211,000 barrels for exports, for the first time since 1949, when Harry Truman was president," the agency quoted data from the US Energy Information Administration (EIA) as saying. 
As recently as 1973, the US administration imposed a ban on exporting hydrocarbons abroad because of the energy crisis triggered by the OPEC ban Fuel to the United States, because of its absolute support for Israel in the October 1973 war with the Arab states. 
According to the agency, the peak of net oil imports to the United States was recorded in 2005, and amounted to 12.5 million barrels per day.
"We have become a dominant power in the world energy market, and changes are still not enough to trigger a giant revolution," analyst Michael Lynch told the agency. "But it will be enough to force OPEC to think long through its members' negotiations to cut production. 
The publication of the statistical data coincided with the meeting in Vienna, where the OPEC countries are trying to agree to extend the production cut agreement to support prices. 
Under the terms of this agreement, which has proved effective in the dynamics of raising oil prices, total production should be reduced by a minimum of one million bpd to keep prices at a higher level. 
However, the negotiations concluded on December 6 did not reach any agreement, pending the meeting scheduled today between the members of the Organization and a number of producing countries from outside.
  • Upvote 1
Link to comment
Share on other sites

image.php?token=3aef5cda2412e6b89e209af56296b34d&size=

Iraq is confident of the consensus of OPEC members to reduce oil production
 
Number of readings: 1634 07-12-2018 12:24 PM
 
 

07-12-2018 12:24 PM 

 

Oil Minister Thamir al-Ghadhban confirmed on Friday his confidence in an agreement on reducing oil production among the 25 OPEC member countries. 

"We are still discussing between us and tomorrow we will discuss it with our non-OPEC partners, and I am confident that an agreement can be reached," Ghadhban told a news briefing. 

  • Upvote 2
Link to comment
Share on other sites

  • yota691 changed the title to Baghdad intends to sweep the world oil market
 
11719.jpg
An Iraqi oil field. "The island"
  

 energy


Economy News Baghdad

After years of political, security and economic chaos, Iraq is once again becoming the second most important oil producer in the Organization of the Petroleum Exporting Countries (OPEC) last September.

According to a report in France's Le Monde newspaper, four years after his war against Da'ash, which has negatively affected part of its oil infrastructure in the north, Iraq is now recovering its economic position.

The report, written by Nabil Wakim and Eileen Saloon, said the goal of the new oil minister, Thamir al-Ghadhban, was to develop infrastructure and restructure the energy sector, which was overshadowed by corruption and mismanagement.

Al-Ghadhban, according to the report, seeks to make his country produce five million barrels of oil per day in 2019, with 3.8 million barrels for export.

Attracting international companies

The authors noted that OPEC considers that Iraq is in a period of recovery from the scourge of war, and stressed that in 2016, the Organization decided to reduce production significantly to raise oil prices, but did not comply with Mesopotamia to the demands of its partners under the pretext of their own circumstances.

The new oil minister in Iraq, Thamir al-Ghadhban, told the Le Monde newspaper in early November that "Iraq's interest is to reach higher oil prices."

"What is important for us is a fair price for producers and consumers, and a stable price that guarantees the balance of our national budget, which is based on 90 percent of its revenues on oil," the report quoted Ghadban as saying.

The sharp drop in oil prices, which fell to around $ 60 last month, could have serious consequences for Baghdad. The budget currently under discussion in parliament is estimated at $ 112 billion in expenditure and an estimated $ 23 billion deficit, According to an Iraqi source.

The report added that the new oil minister does not hide his intention to open the doors of Iraq to international companies to support the development of the country.

The report also quoted the head of a French company in the oil sector as saying: "Iraq began to open the way for international companies, especially with the presence of a government on the head of Iraq strongly supports the petroleum industry."

Financing reconstruction

Le Monde's report pointed out that oil revenues are essential for a country like Iraq that has suffered decades of war and economic sanctions.

Fifteen years after the US military intervention, Iraq finds itself in the process of financing the reconstruction process following the war it waged against Da'ash.

The report pointed out that with the United States imposing sanctions on Iranian oil, Iraq could use it to fill part of the demand for black gold, and could benefit from resuming the export of oil from the fields of Kirkuk to the port of Ceyhan (Turkey) through the pipeline crossing Iraqi Kurdistan.

According to the authors, the priority of Iraq's new oil minister is mainly to develop infrastructure in the south, where most of the production capacity is concentrated, and the new minister is looking to diversify the export network with the extension of new pipelines. Jordan. 

Source: Le Monde


Views 35   Date Added 08/12/2018

 
  • Thanks 1
  • Upvote 2
Link to comment
Share on other sites

Oil minister: OPEC agreement to cut production will continue for six months

07:40 - 07/12/2018

 
image
 
 

BAGHDAD (Reuters) - 
Oil Minister Thamir al-Ghadhban said on Friday that OPEC's latest cut in output would last for six months. 
According to Reuters, "OPEC member states have agreed to reduce oil production to 1.2 million barrels, and that the agreement will continue for six months." 
"We have to accept this because we are in one boat." 
As soon as the agreement was announced, oil prices jumped by 5%

  • Upvote 1
Link to comment
Share on other sites

Editorial Date: 2018/12/7 9:56 • 234 times read
Iraq is confident of reaching an agreement in OPEC
[Ayna-follow-up] 
Oil Minister Thamer Ghadhban expressed confidence in the possibility of reaching agreement on oil production between the Organization of the Petroleum Exporting Countries (OPEC) and producers from outside the organization.
"They are still in the process of discussing within OPEC, and will start discussions with producers from outside the organization, expressing confidence in the possibility of reaching an agreement," Ghadhban said in a press statement. 
"He will participate in the OPEC meeting scheduled for later in the day, Friday, for the reduction of oil production in the first half of 2019, without specifying the size of this reduction." 
International oil prices fell late on Thursday, with cautious sentiment as European and Asian financial markets plummeted ahead of a meeting of major crude exporters in the world.
  • Upvote 1
Link to comment
Share on other sites

Date of release: 2018/12/7 16:33  354 times read
OPEC announces its readiness to cut oil production by about 800 thousand barrels per day
(Reuters) - Iran gave the group the green light on Friday to cut output by about 800,000 bpd from 2019, an OPEC source said.
The source added that OPEC will later ask non-member producers to contribute to the reductions by another 0.4 million barrels per day
  • Upvote 1
Link to comment
Share on other sites

Date of release: 2018/12/7 13:23 • 176 times read
OPEC has yet to reach a final agreement with Iran's request for exemption
(Reuters) 
- Iran appears to be the main obstacle to an OPEC deal to cut oil output on Friday, while Saudi Arabia, the world's largest producer, has yet to agree to exempt Tehran, which is under US sanctions, two OPEC sources said.
The Organization of the Petroleum Exporting Countries (OPEC) is resuming discussions in Vienna on Friday ahead of a meeting with non-OPEC producers led by Russia. 
On Thursday, OPEC sources said the group had tentatively agreed to cut oil production but had not yet decided on specific benchmarks for cuts while waiting for a commitment from Russia, a heavyweight producer outside the organization. 
Two OPEC sources said on Saturday that Saudi Arabia, Iran's arch-rival, to which US sanctions were imposed in November, was also delaying a final deal. 
"Iran will insist on an exception until the sanctions are lifted," an OPEC source said. 
Saudi Arabia is under pressure from US President Donald Trump to help the world economy by not cutting supplies. 
With Trump trying to pressure Tehran to sanctions, a cut in OPEC output would provide additional support to Tehran by increasing the price of oil.
The crisis over the killing of Saudi journalist Jamal Khashoggi at his consulate in Istanbul in October could make it harder for OPEC to make any decision. Trump has supported Saudi Crown Prince Mohammed bin Salman, despite the demand by many US politicians to impose severe sanctions on Riyadh. 
US Ambassador to Iran Brian Hawk met with Saudi Energy Minister Khalid al-Falih in Vienna this week, in an unprecedented development ahead of the OPEC meeting. Saudi Arabia initially denied talks between Hawk and al-Faleh. 
Oil prices have fallen by about a third since October to below $ 60 a barrel as Saudi Arabia, Russia and the United Arab Emirates raised production to offset the drop in exports to Iran, OPEC's third largest producer.
The low price prompted OPEC and its allies to discuss production cuts. Al-Faleh said on Thursday that potential cuts from the deal's dealors range from half a million to 1.5 million bpd. 
Faleh said a reduction of one million barrels per day would be acceptable and that the basic concept so far, but added that there is a need for Russia's commitment in large quantities. 
"We still want to reduce Russia as much as possible," Faleh told reporters. 
Russian Energy Minister Alexander Novak met with President Vladimir Putin on Thursday in St. Petersburg and returned to the Austrian capital on Friday morning. 
OPEC meets with its allies at 1100 GMT. 
Russia, Saudi Arabia and the United States have been at the forefront of crude producers in recent years. The United States is not involved in any initiatives to restrict production due to antitrust laws and fragmentation of its oil sector
  • Upvote 1
Link to comment
Share on other sites

  • yota691 changed the title to Oil Minister: Iraq's share of the reduction will be about 140 thousand barrels
 
Friday, 7 December
 
 
Search Bigger
 
 

Alsumaria News / Baghdad
, Oil Minister Thamer Ghadban on Friday that the share of Iraq from the reduction will be up to 140 000 barrels per day, noting that the Organization of Petroleum Exportingborne the brunt of the reduction. 

"The share of Iraq from the reduction will be about 140 thousand barrels per day instead of 220 thousand barrels per day, which Iraq has committed to the past during 2017," he said, adding that "the reduction is acceptable to us, especially if we know that the price of oil Which was put within the budget of 2019 is 56 dollars a barrel with a total deficit of 20% and therefore we need a price better practical and not planning. "

 


Al-Ghadhban added that "the reduction rate put on the producers of OPEC reached 800 thousand barrels a day and the producers from outside the Organization of up to 400 thousand barrels per day, considering OPEC's production of 32 million barrels per day and non-OPEC by 18 million barrels per day." 

Al-Ghadhban pointed out that "OPEC and the producer countries from outside the Organization agreed to the proposal of Iraq to be a significant reduction to have an impact and echo on the oil market, which we felt as soon as the announcement of the reduction after the rise of oil prices by 5%." 

Opec members and outside producers such as Russia met in Vienna on Thursday to agree on a reduction in oil production to raise oil prices, which began to decline in turn after having improved markedly two months ago.

  • Upvote 1
Link to comment
Share on other sites

  • yota691 changed the title to OPEC and its allies cut oil production by 1.2 million barrels

OPEC and its allies cut oil production by 1.2 million barrels

OPEC and its allies cut oil production by 1.2 million barrels

 07 December 2018 07:50 PM
Mubasher: The  Organization of Petroleum Exporting Countries (OPEC) and its producer allies reached an agreement that would reduce crude production levels next year.

The Organization said in a statement issued Friday that it had decided to cut the production of the 15 member countries by about 0.8 million barrels per day from the levels of last October, starting January 1 and for the next 6 months.

OPEC said it would assess the decision in April.

Reuters has quoted the Iraqi oil minister as saying that OPEC will ask non-member crude producers to cut 0.4 million barrels per day of crude in 2019.

 
  • Upvote 1
Link to comment
Share on other sites

Al-Rashidi: Kuwait supports the decisions of "OPEC" to maintain the stability of oil markets

Al-Rashidi: Kuwait supports the decisions of "OPEC" to maintain the stability of oil markets
The Minister of Oil and electricity and water, the Kuwaiti Bakheit Rashidi
 07 December 2018 04:58 PM

 

Kuwait - directly: Oil Minister and Minister of electricity and water , the Kuwaiti, that his country strongly supports the stability of oil markets and supports all of the decisions that Ttakzھa the Organization of the Petroleum Exporting Countries (OPEC) to maintain the stability of the markets and adjust the supply and demand balance .

The Minister of Foreign Affairs, Bakhit al-Rashidi, told Kuwait News Agency (KUNA) Friday that the fifth ministerial meeting of its kind will be held for the producers from inside and outside the organization to discuss the developments in the oil market and the need for producers to adjust the production ceiling.

Al-Rashidi pointed out several mechanisms to preserve the stock. OPEC, during the previous period from January last year until last November, has the capacity to absorb more than 30 million barrels to maintain market stability.

The minister expressed his strong belief that the recent decisions of the Organization of Petroleum Exporting Countries (OPEC) since the historic declaration of 2016 were very successful, pointing to OPEC's keenness to maintain the agreement with producers from outside and determine the level of production.

On Qatar's decision to quit OPEC and its impact on the Organization, Al-Rushaidi said that Kuwait respects Qatar's decision and is in accordance with Qatari policy and has the right to remain in the Organization or to withdraw from it.

On the other hand, Iraqi Oil Minister Thamir al-Ghadhban revealed to KUNA that there were several scenarios during the ministerial meeting of OPEC, but the final decision has not yet been taken.

He explained that the final decision would be taken at the joint ministerial council, which includes oil ministers of non-OPEC countries like Russia.

The Iraqi minister expressed his optimism to reach a unanimous decision that takes into account the interests of all, taking into account the circumstances of each country.

He referred to the circumstances of Iraq, especially in light of the war against terrorism, in addition to the great population growth and others.

Al-Ghadhban stressed that the low prices are not in the interest of Iraq or in the interest of other Member States, pointing out that the figure adopted by Iraq in the budget is not enough and there is no less than 20 percent budget deficit in the country, especially as Iraq's needs are larger than the budget expected for the coming year .

On Qatar's exit from the organization, the Iraqi oil minister said he met with his Qatari counterpart, adding: "It was a meeting of Wadia and I personally wished him a regret for this decision."

But the Iraqi minister stressed that his country "respects the decision of Qatar because it will lead them to say that they are a leading country in the production of gas in the world and far exceeds the production of oil.

For his part, Qatari Oil Minister Sa'd al-Kaabi commented on his country's withdrawal from the Organization of the Petroleum Exporting Countries and whether his country will continue to support the global oil market.

"OPEC is capable of protecting itself and controlling production rates according to the needs of the global market," he said, pointing out that his country does not intend at the moment to engage in any oil initiative, especially as it is a country that produces a small amount of oil .

  • Upvote 1
Link to comment
Share on other sites

  • yota691 changed the title to Brent crude rises after agreement on cut production but prospects for 2019 are weak
 
8819.jpg
crude oil
  

 Arab and international


Economy News Baghdad

Brent crude futures rose on Monday after OPEC and some independent producers agreed on Friday to cut supplies from January.

However, next year's price outlook remains weak in a state of economic slowdown.

By 0748 GMT, London Brent crude futures were up 62 cents, up 0.6 percent from the previous close.

Prices rose after the Organization of the Petroleum Exporting Countries (OPEC) and some independent producers, including Russia, a heavyweight producer, said on Friday they would reduce crude oil production by 1.2 million barrels per day as OPEC members cut output by 800,000 bpd, Production by 400 thousand barrels per day.

The closing of the oil field in Libya, with a production of 315,000 bpd, also helped push Brent higher, traders said.

But the US WTI futures contract fell 10 cents from the previous level to $ 52.51 a barrel, affected by higher US production as the booming US oil sector does not participate in the announced cuts.

Morgan Stanley said the cut was "probably enough to balance the market in the first half of 2019 and prevent inventories from rising."

He said he expected Brent to reach $ 67.5 a barrel by the second quarter of 2019, down from $ 77.5 before.


Views 27   Date Added 12/10/2018
 

 
 
  • Thanks 1
  • Upvote 1
Link to comment
Share on other sites

  • yota691 changed the title to Oil prices are on the rise thanks to the rise in Asian shares and OPEC-led cuts
 
11788.jpg
An oil refinery belonging to Total France in France. "Reuters"
  

 Arab and international


Economy News Baghdad

Oil prices rose about 1 percent on Wednesday, as the stock market recovered and expectations that OPEC-led production cuts in 2019 would stabilize the balance between supply and demand.

Analysts said the prices also received support from the disruption of Libyan oil exports after local gunmen took control of the field of spark oil, the largest field in the country.

Global Brent crude futures were $ 60.86 a barrel, up 66 cents, or 1.1 percent, compared to the previous close.

US West Texas Intermediate crude futures were $ 52.22 a barrel, up 57 cents, or 1.1 percent.

The rise in prices comes in light of the rise of Asian stock markets on Wednesday.

Although market confidence strengthened on Tuesday, analysts warned of an economic slowdown.

As for the fundamentals of the oil market, prices were supported this week by the decision of the Organization of the Petroleum Exporting Countries (OPEC) and some independent producers, including Russia, last week to cut supplies by 1.2 million barrels per day.

Oil prices lost a third of their value between early October and when the cuts were announced. However, some analysts warn that the deal may not have the desired effect.


Views 116   Date Added 12/12/2018

 
  • Upvote 1
Link to comment
Share on other sites

Date of release:: 2018/12/12 13:23  120 times read
Oil prices rise with stock market recovery and OPEC-led cuts
{International: Al Furat News} Oil prices rose about 1 percent on Wednesday as the stock market recovered and expectations that OPEC-led production cuts in 2019 would stabilize supply-demand balance.
Analysts said the prices also received support from the disruption of Libyan oil exports after local gunmen took control of the field of spark oil, the largest field in the country. 
Global Brent crude futures were $ 60.86 a barrel, up 66 cents, or 1.1 percent, compared to the previous close. 
US West Texas Intermediate crude futures were $ 52.22 a barrel, up 57 cents, or 1.1 percent. 
The rise in prices comes in the wake of the rise of Asian stock markets on Wednesday. 
US President Donald Trump said in a press statement Tuesday that talks with China were underway to defuse the trade dispute between the world's two largest economies. 
Although market confidence strengthened on Tuesday, analysts warned of an economic slowdown.

"The main risk in the short-term outlook is a faster-than-expected deterioration in economic activity," Barclays Bank said in its 2019 commodity outlook. 
As for the fundamentals of the oil market, prices were supported this week by the decision of the Organization of the Petroleum Exporting Countries (OPEC) and some independent producers, including Russia, last week to cut supplies 1.2 million barrels per day. 
"OPEC production cuts will stabilize the market," ANZ Bank said on Wednesday. 
Oil prices lost a third of their value between early October and when the cuts were announced. However, some analysts warn that the agreement may not have the desired effect
  • Upvote 2
Link to comment
Share on other sites

  • yota691 changed the title to Iraq reveals its share of OPEC production cuts
 
11830.jpg
 
  

 energy


Economy News _ Baghdad

Oil Minister Thamer al-Ghadhban revealed Iraq's share of the latest agreement by the Organization of the Petroleum Exporting Countries (OPEC) to cut production last Friday. 
Al-Ghadhban said in a press statement that "Iraq played a constructive and effective role in bringing the views closer after the situation worsened during the ministerial meeting. He proposed that the reduction of 1.2 million barrels be clearly effective. The proposal was supported by the large and influential member states such as the Kingdom Saudi Arabia, and the UAE, and to persuade countries outside the organization. " 
He pointed out that "the amount of production of OPEC members 32 million barrels, and the countries outside the 18 million barrels, a reduction of 800 thousand barrels to member states and 400 thousand barrels to countries from outside."
"Iraq's share of the reduction is close to 140,000 barrels per day, which is acceptable against what it expects from an improvement in oil prices. It is also less than the reduction in the first agreement," Ghadhban said. 
The Organization of Petroleum Exporting Countries (OPEC) last Friday announced an agreement to reduce production by more than one million barrels per day in an attempt to boost prices. 
OPEC and its major oil producers, led by Russia, announced a plan to cut output on Friday, prompting a rise in Brent crude prices. 
The deal is due to begin in January and for six months. 
The plan, which includes production cuts of 1.2 million bpd, came in response to a sharp fall in world oil prices by about 30 percent since last October.


Views 9   Date Added 12/13/2018

 
  • Upvote 1
Link to comment
Share on other sites

What Would The End Of OPEC Mean?

Dec 13, 2018, 4:00 PM CST

OPEC

The Organization of the Petroleum Exporting Countries - the oil market institution that has exerted an unyielding power over the price of crude for nearly 60 years - is now in deep crisis. The latest OPEC meeting in Vienna offered new insights into the cartel’s raging civil war that is tearing it apart and threatens to ultimately make the cartel irrelevant.

In a two-year period since the group of 15 major oil producers formed an alliance with Russia, OPEC’s smaller members have been marginalized, their voices have been diminished and Saudi Arabia seems to prioritize its partnership with Moscow above all else. An unlikely partnership between Saudi Arabia and Russia is causing dissension within OPEC, with one of the oldest members announcing it would withdraw from the organization in January just days prior to the talks. With Russia tightening its grip over OPEC’s decisions and the United States officially reaching net oil exporting status in late November for the first time in decades, even if only briefly, the new world oil order is now dependent on three energy superpowers: Saudi Arabia, Russia and the United States.

OPEC has been under the barrage of external and internal forces since the day of its inception in 1960. Yet, even during the most tumultuous years of the Iran-Iraq war in the 1980s, OPEC still met twice a year and managed to coordinate policy to support the price of crude oil. This was not the case during the pivotal OPEC meeting last week in Vienna, where geopolitics ruthlessly invaded the talks.

After the first day of negotiations OPEC members emerged without a consensus, canceled a press conference and crude prices tumbled. West Texas Intermediate had already suffered a hefty loss of 22% in November, marking the worst month for the U.S. oil benchmark since the financial crisis in 2008. In early Thursday trading, WTI shed an additional 3% in value after Saudi Energy Minister Khalid al-Falih said that a “no deal” outcome is real and that Saudi Arabia would not go for a production cut alone. These comments were quickly followed by a statement from Iranian Oil Minister Bijan Zanganesh that his country under no circumstances would curb output, citing U.S. sanctions. Zanganesh’s comments carried a clear undertone of bitterness over Saudi cooperation with U.S. President Donald Trump’s re-imposition of the sanctions that took effect in early November. Related: Saudi Arabia Under Fire From All Sides

During the second day of the conference, the oil market held its breath, while waiting for the Russian Delegation to come to the negotiating table. Russia - the second largest oil producer in the world has increased its oil production to a post-Soviet high of 11.41 million bpd while Russian oil companies have been investing heavily in their upstream activities and oilfield maintenance.

Russia agreed to a larger-than-expected cut of 230,000 bpd, the lion’s share of the 400,000 bpd reduction in crude production from the non-OPEC contingent. Saudi Arabia would curb output by 250,000 bpd under OPEC’s collective cut of 800,000 bpd according to news reports, with OPEC+ offering no breakdown of country quotas.

Upon conclusion of the OPEC+ talks, WTI futures stabilized, recovering 2.2% of their value on Dec. 7 to $52.61 bbl while Brent recovered by 2.7% to $61.67 bbl. Several analysts said oil futures would have sold off absent an agreement. Russia played a crucial role in bringing Iran into the framework of an agreement while backing temporary exemptions from the cuts for Libya, Nigeria, Iran and Venezuela. After the hard-fought agreement was struck Nigerian oil minister, Emmanuel Ibe Kachikwu was quoted as saying that not having Russia “around the table would be a futile exercise.”

Other OPEC members are not as enthusiastic about Russia’s growing influence over the cartel’s decisions. The nation of Qatar, which joined OPEC in 1961, served notice of withdrawal from the organization days before the meeting in Vienna. Qatar’s oil production has steadily declined and currently represents only 2% of OPEC’s total output or 609,000 bpd. Yet, news that one of the oldest OPEC members is leaving the cartel after almost 60 years is serving as a shot across the bow for the Vienna-headquartered producer group.

Two days of intense negotiations last week revealed intensifying resentment from members of OPEC who feel sidelined by the growing partnership between Saudi Arabia and Russia. As several members chafed against the power shift within the organization, they were prepared to vote against an agreement that would halt the selloff in a commodity critical to their economies, ultimately rendering OPEC and their meeting useless and irrelevant.

 

Related: Will China Turn Its Back On U.S. LNG?

Ever since Saudi Arabia and Russia reached an agreement on production cuts in late 2016, the Saudis have insisted that Russia participate in all meetings. The success of this unexpected partnership is a testament to the fact that even geopolitical rivals that have been on opposing sides of almost every conflict affecting the Middle East can become allies when mutually beneficial.

While some analysts predict the biggest test for the Saudi-Russian relationship is yet to come, the two countries enjoy their “marriage made in oil heaven” along with the multi-billion-dollar investment projects following King Salman’s first trip to Moscow. During the G20 International Forum in Buenos Aires, Russian President Vladimir Putin and Saudi Crown Prince Mohammad bin Salman shared laughs and high-fives.

Fading OPEC influence has everything to do with the energy renaissance in the United States. The United States has emerged as one of the world’s top three oil producers, recently overtaking Russia to become the world’s top oil producer, a dramatic turnaround from 10 years ago that has readjusted the world order and shaken OPEC. In late November, the United States was a net oil exporter while shipping a record 3.2 million bpd of crude oil, more than double the volume from a year ago. It was the first time petroleum exports exceeded imports since 1949.

U.S. producers have added a volume equivalent to the entire output of OPEC’s Nigeria in the past twelve months, reaching record high crude production at 11.7 million bpd in November. According to the Energy Information Administration, U.S. crude production could reach 12.05 million bpd in April, six months sooner than forecast in October, and reaching 12.29 million bpd in December 2019. These are the worrying statistics for OPEC, as it loses control in determining world oil prices and market share to producers in the United States. And while Russia has worked with OPEC in the past, Saudi Arabia clearly eyes Russia as an essential partner to guide world oil prices through targeted production cuts.

As the Moscow-Riyadh partnership strengthens and OPEC cohesion frays, the growing power of the United States over the global oil markets was clearly a factor during the negotiations in Vienna last week. The verdict is still out on whether the OPEC+ deal to cut 1.2 million bpd during the first half of 2019 will be enough to offset surging production from the United States and bring the markets into equilibrium.

Even before last week’s meeting and the acrimony leading up to it, OPEC faced an ominous future. News reports surfaced in early November that King Abdullah Petroleum Studies and Research Center, a think tank based in Riyadh, was conducting a study on what it would mean if OPEC dissolved. Kapsarc, headed by former U.S. EIA Administrator Adam Sieminski, are considering what the end of OPEC would mean to world oil markets and to Saudi Arabia’s role in those markets.

 

 

https://oilprice.com/Geopolitics/International/What-Would-The-End-Of-OPEC-Mean.html

  • Like 1
  • Thanks 4
Link to comment
Share on other sites

  • yota691 changed the title to Oil rises 1% on settlement amid fears of supply shortages
  • TexasGranny locked this topic
Guest
This topic is now closed to further replies.
 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.



×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.