Updated: oil falls 5% upon settlement, with geopolitical concerns calm

[yota691]

OPEC+ oil supply cuts won’t prevent surplus in 2020 – IEA

Oil inventories may accumulate by 700,000 barrels a day in Q1 even if OPEC+ implements its entire cutback of 2.1 million bpd

Energy

 

Global oil markets still face a surplus next year even if OPEC and its partners deliver newly-announced production cuts in full, the International Energy Agency said.

Oil inventories may accumulate by 700,000 barrels a day in the first quarter even if the Organization of Petroleum Exporting Countries and its allies implement the entire cutback of 2.1 million barrels a day agreed earlier this month, the IEA said in a monthly report. Supplies outside the group, led by US shale, continue to grow much faster than world demand.

 

 

 

While crude prices climbed to a 12-week high in New York after OPEC+ surprised traders with their latest intervention, they remain below $60 a barrel amid concern that the additional output curbs still won’t be enough. The US briefly became a net exporter of oil three months ago, underscoring the challenge OPEC faces from America’s shale boom.

Stubborn surplus

“The market has done its own sums and the reaction to oil’s new deal has so far been muted,” said the Paris-based agency, which advises most of the world’s major economies.

The extra OPEC+ curbs would translate into an actual reduction from current levels of 532,000 barrels a day, the IEA said. Implementing that fully may be a tall order, as some producers like Iraq and Nigeria have barely made the cutbacks they promised to enact this year.

A change to the terms of the OPEC+ agreement, which now exempts light oil known as condensate produced by the non-OPEC members, could also undermine the coalition’s efforts. Condensate production in those countries, such as Russia and Azerbaijan, has the potential to increased from its current level of about 1.5 million barrels a day, according to the IEA.

Saudi Arabia, OPEC’s biggest member, has already made considerable progress in fulfilling its output commitments, including additional voluntary reductions announced at the close of the OPEC meeting on Dec. 6. The kingdom pumped 9.9 million barrels a day in November, the IEA estimated.

“The overall effectiveness of the OPEC+ agreement depends on the willingness of all its parties to fully comply, including those whose compliance so far has been less rigorous,” the agency said.

OPEC and its partners are getting some solace from a recent recovery in oil demand. Global consumption increased at the strongest rate in a year during the third quarter, expanding by 900,000 barrels a day, according to the report. That’s almost twice the pace seen in the second quarter.

Demand is set to accelerate further in 2020, when it will expand by 1.2 million barrels a day — about 1.2 per cent — to average 101.5 million barrels a day, the IEA predicts.

OPEC may also be reassured that supply from some of its rivals, such as the U.S., Brazil and Ghana, is increasing less quickly than the IEA previously forecast. The agency lowered its projections for non-OPEC production growth in 2020 by about 200,000 barrels a day.

Yet supplies outside OPEC will nonetheless expand much more vigorously than world demand, swelling by 2.1 million barrels a day next year as a new tide of American shale-oil is joined by offshore projects once considered unviable in an era of constrained prices, from Brazil, Norway and Guyana.

As a result, the surplus in global markets may swell to as much as 1 million barrels a day during the second quarter, the agency said. That poses a considerable challenge for the cartel and its allies, who will meet again in early March to consider their next move.

[yota691]

Updated .. oil rises on settlement to the highest level in 3 months

 December 16, 2019 10:55 PM
Mubasher: Oil prices rose to a 3-month high when settling Monday's deals, with the partial US trade deal with China agreed.

And the largest economies around the world signed at the end of last week the first stage of the trade deal, which was the reason behind announcing the dropping of a new round of planned tariffs on the Chinese side.

Also, on Sunday, the State Council Customs Authority announced that additional tariffs on some American goods that were supposed to enter into force on December 15 had been suspended.

On the other hand, crude was supported by positive economic data in China, which revealed that industrial production in the second largest economy around the world rose by about 6.2 percent.

Upon settlement, the price of US NYMEX crude for January delivery rose 0.2 percent to $ 60.21 a barrel, the highest level for this most active contract since September 16.

By 7:46 pm GMT, Brent crude for February delivery, the price of standard crude futures rose by more than 0.2 percent to $ 65.37 a barrel.

 

[yota691]

Russian Lukoil: oil at $ 60-65 a barrel, comfortable for OPEC + producers

 

Arab and international Economy News _ Baghdad Leonid Fedon, vice president of the Russian oil company Lukoil, said that an oil price of between 60 and 65 dollars a barrel would be comfortable for the participants in the agreement concluded by OPEC + producers to curb supplies. The Organization of the Petroleum Exporting Countries + OPEC has pledged one of the largest production cuts in the sector in a contract from January 1 in an effort to avoid excess supply and support prices. Fedon said that price shocks only occur when producers violate their pledges, and Brent crude has reached $ 65.5 a barrel. Number of views 33   Added Date 12/17/2019

[6ly410]

Oil continues to rise above $ 65 a barrel

Economy 12:57 - 18/12/2019

https://www.mawazin.net/Details.aspx?jimare=77713

Follow up - Mawazine News

Oil prices rose by more than one percent, on Tuesday, supported by hopes that the trade agreement between the United States and China will boost demand for crude in 2020 after a long-running dispute between the world's two largest economies that had a negative impact on sentiment in global markets.
The White House economic adviser, Larry Kudlow, said the "stage 1" agreement between the United States and China was "completely completed", expecting that it would double US exports to China over two years.
Brent crude futures ended the trading session higher, 76 cents, or 1.2 percent, to settle at $ 66.10 a barrel.
US benchmark West Texas Intermediate crude futures rose 73 cents, or 1.2 percent, to close at $ 60.94 a barrel.
Oil markets are still supported by the OPEC and its allies like Russia, the group known as OPEC +, to agree to an additional cut of 500,000 barrels per day in crude supplies from January 1.
This comes above the current agreement to reduce supplies by 1.2 million barrels per day, which came into effect at the beginning of January this year.
The market is awaiting the latest data on oil stocks in the United States, which will be issued by the American Petroleum Institute at a later time, and the US Energy Information Administration tomorrow, Wednesday.

[yota691]

Oil prices rise to the highest level in 3 months

Editing Date: 2019/12/19 11:08 • 103 times read

International: Al Furat News: Oil prices remained above their highest levels in three months on Thursday, to continue a series of strong rally that started a week ago, at a time when global markets were supported by a breakthrough in trade relations between the United States and China.

By 0645 GMT, Brent crude futures rose eight cents to $ 66.25 a barrel, while U.S. West Texas Intermediate crude increased four cents to $ 60.97 a barrel. Trading volumes were meager, as he was unable to even report on the accountability of US President Donald Trump to move the oil market.
This trend puts oil prices towards the rise for the third week in a row, to move thanks to the momentum generated by this month's announcements on increasing oil production cuts by major producers as well as the 'stage one' agreement between the states United and China to end their long-running trade war.
The agreement between the two largest economies in the world pushed the outlook for the global economy to improve, raising the prospects for increased energy demand next year and supporting oil prices.
In another sign of a breakthrough in relations, the Chinese Ministry of Finance on Thursday published a new list of six US products that will be exempt from customs duties as of December 26.
Last week, the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers such as Russia agreed to increase oil production cuts by 500,000 bpd from January 1, in addition to previous cuts of 1.2 million bpd.
According to weekly data released by the US Energy Information Administration on Wednesday, US oil inventories fell 1.1 million barrels in the week ending December 13, while gasoline and distillate inventories rose.

[yota691]

Oil prices rise to the highest level in 3 months thanks to a breakthrough between America and China

 

Arab and international Economy News _ Baghdad Oil prices remained above their three-month highs on Thursday, continuing a series of strong rally that started a week ago, as global markets received support from a breakthrough in trade relations between the United States and China. By 0645 GMT, Brent crude futures rose eight cents to $ 66.25 a barrel, while U.S. West Texas Intermediate crude increased four cents to $ 60.97 a barrel. Trading volumes were meager, as he was unable to even report on the accountability of US President Donald Trump to move the oil market. This trend puts oil prices towards the rise for the third week in a row, to move thanks to the momentum generated by this month's announcements on increasing oil production cuts by major producers as well as the 'stage one' agreement between the states United and China to end their long-running trade war. The agreement between the two largest economies in the world pushed the outlook for the global economy to improve, raising the prospects for increased energy demand next year and supporting oil prices. In another sign of a breakthrough in relations, the Chinese Ministry of Finance on Thursday published a new list of six US products that will be exempt from customs duties as of December 26. Last week, the Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russia agreed to increase oil production cuts by 500,000 bpd from January 1, in addition to previous cuts of 1.2 million bpd. According to weekly data released by the US Energy Information Administration on Wednesday, US oil inventories fell 1.1 million barrels in the week ending December 13, while gasoline and distillate stocks rose. Views 34   Added Date 12/19/2019

[yota691]

An agreement between two countries to raise oil prices to the highest level

 

 

 12/19 2019 10:16:24

 

Shafaq News / Oil prices reached their highest level in three months, today, Thursday, to continue a series of strong rally that started a week ago, at a time when global markets received support from a breakthrough in trade relations between the United States and China.

Brent crude futures rose eight cents to 66.25 dollars a barrel, while West Texas Intermediate U.S. crude increased four cents to 60.97 dollars a barrel, and trading volumes were meager, as news of President Donald Trump's accountability failed to move the oil market.

This trend puts oil prices towards the rise for the third week in a row, to move thanks to the momentum generated by this month's announcements of increasing oil production cuts by major producers, as well as the "stage 1" agreement between the United States and China to end their long-running trade war.

The agreement between the two largest economies in the world pushed the prospects of the global economy to improve, raising the possibilities of increasing energy demand in the next year, and supporting oil prices, and China revealed a new list of six US chemical and oil commodities that will be exempt from customs duties days after the world's two largest economies announced an agreement. Stage 1 "commercial.

According to the Ministry of Finance, the exemption will be applied for a period of one year from December 26 without mentioning the value of duty-free imports.

She added that the fees that were already imposed on American products will not be refunded, and the exemption from fees will apply to four chemical products and two refined oil producers.

China raised the tariffs on some shipments of soybeans and pork received from the United States on December 6, before the two sides reached a "one-stage" agreement, which aims to abolish customs duties that were to be applied on December 15.

China has announced that it will continue to work to exempt products from customs duties, and will announce the second batch of exemptions in a timely manner.

In another sign of a breakthrough in relations, the Chinese Ministry of Finance released today a new list of six US products that will be exempt from customs duties as of December 26.

Last week, the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers such as Russia agreed to increase oil production cuts by 500,000 barrels per day as of January 1, in addition to previous cuts of 1.2 million barrels per day.

According to weekly data released by the US Energy Information Administration yesterday, US oil inventories fell 1.1 million barrels in the week ending December 13, while gasoline and distillate stocks rose.

[yota691]

International institute report: Iraq fails to comply with OPEC agreement to reduce oil production

 

 

 2019/12/20 07:46:44

 

Shafaq News / The International Finance Institute believes that the decision of OPEC and allies of crude producers to deepen the agreement to reduce production may not be sufficient to curb excess supply in 2020 and thus achieve a balance in the market.

On December 6, the (OPEC +) alliance that includes Russia and other non-members of the Organization of Petroleum Exporting Countries (OPEC) agreed to further reduce production levels by about 0.5 million barrels per day.

This means that the group's production will be about 1.7 million barrels per day less than the total levels of October 2018, which is the reference month for the agreement.

It is expected that the OPEC members, led by Saudi Arabia, will bear the bulk of the recent cuts decision by reducing oil production by about 0.34 million barrels per day, while the allies, led by Russia, will implement the rest of the reduction.

While actual Saudi oil production is less than the 2019 target, by contrast, Iraq has failed to comply with the agreement, producing 0.15 million barrels per day above the year target.

Iran, Libya and Venezuela still enjoy exemptions from the OPEC + production cut agreement.

[yota691]

Finance Institute: OPEC and allies cuts are not enough to increase oil prices

 December 20, 2019 03:26 PM
Mubasher - Sally Ismail: The Institute of International Finance believes that the decision of OPEC and allies of crude producers to deepen the agreement to reduce production may not be sufficient to curb excess supply in 2020 and thus achieve a balance in the market.

On December 6, the (OPEC +) alliance that includes Russia and other non-members of the Organization of Petroleum Exporting Countries (OPEC) agreed to further reduce production levels by about 0.5 million barrels per day.

This means that the group's production will be about 1.7 million barrels per day less than the total levels of October 2018, which is the reference month for the agreement.

It is expected that the OPEC members, led by Saudi Arabia, will bear the bulk of the recent cuts decision by reducing oil production by about 0.34 million barrels per day, while the allies, led by Russia, will implement the rest of the reduction.

While actual Saudi oil production is less than the 2019 target, by contrast, Iraq has failed to comply with the agreement, producing 0.15 million barrels per day above the year target.

Iran, Libya and Venezuela still enjoy exemptions from the OPEC + production cut deal.

 

According to the estimates of a recent report issued by the International Institute, it is expected that fuel stocks will increase by about one million barrels per day in 2020, after an increase of 0.2 million barrels per day in the current year.

Accordingly, we expect a drop in the average price of Brent crude to $ 60 a barrel in 2020 compared to $ 64 a barrel in 2019.

Oil futures indicate a drop in prices to an average of $ 62 in 2020.

Whereas, Bloomberg Agency unanimous expectations indicate an additional reduction in oil prices to the level of $ 61 a barrel in the new year.

 

The recent moderate increase in Brent crude prices is largely driven by the disappearance of uncertainties about trade conditions between the United States, China and the Brexit, which are likely to have short-term effects.

For its part, Saudi Arabia agreed to reduce its oil production by 167 thousand barrels per day to 10.15 million barrels per day in 2020.

However, Riyadh is producing oil at levels already around 35,000 b / d lower than its current share.

As a result, even with the extension of the agreement to reduce production levels and additional pledges to reduce compared to the reference month of 2018 (October), Saudi oil production is expected to increase marginally in 2020 to 10.1 million barrels per day.

We also expect - the International Finance Institute - that the average OPEC production will reach 30.1 million barrels per day, which is in line with 2019 levels.

And Iraq's compliance with the agreement was the weakest among the (OPEC +) group, which represents OPEC member states and non-OPEC crude producers, but they follow the same rules.

Apart from (OPEC +), the oil market is still expected to witness strong production of crude in the United States, Canada and Brazil, which would cause an oversupply in 2020.

Meanwhile, oil demand growth is likely to remain subdued given the continued slowdown in the global economy.

The International Energy Agency expects that American oil production will average 13.2 million barrels per day in 2020, which is an increase of 0.9 million barrels per day from 2019 levels.

However, the rate of introducing new platforms into production is still slow, due to the low investment by the major oil companies.

The number of US crude exploration platforms reached the lowest level in 30 months at 667 women by the end of December 13 of this year, which reflects the closure of less profitable platforms.

However, improving the platform's efficiency and productivity can be corroborated by the decline in the number of platforms.

Together with other increases in Canada, Brazil and Norway can produce hundreds of thousands of barrels of oil per day in 2020.

As a result, supply from non-OPEC countries (including the United States) is likely to increase by about two million barrels per day in 2020 compared to an increase of 1.9 million barrels per day in 2019.

This increase would satisfy the growing growth in global demand, and with the fact that OPEC + production is set to remain steady, global stocks will continue to rise and exert additional downward pressure on prices.

The Institute of Finance expects global oil demand growth to slow from 1.4 million barrels per day in 2018 to one million barrels per day in both 2019 and 2020.

It is expected that emerging and developing economies will continue to dominate the growth of global demand for crude , with the fact that China represents half of that increase and India a quarter of the increase.

It can mean global economic growth slower , even with the agreement on calm in the trade war between the United States and China, the demand for oil in 2020 will be lower.

The recent increase in stocks in the United States and other major member countries of the Organization for Economic Cooperation and Development raises fears that weak growth in the Organization and China will weaken demand for oil.

Negative risks to oil prices include one or two of the following speculations:

First: a significant increase in supply from OPEC more than the current OPEC + agreement.

Second: a gradual recovery in oil production from Venezuela.

Third: US oil production growth accelerated more than we expected due to other technological developments in addition to improving efficiency.

[DoD]

LMAO!!!! The most corrupt country in the world an this makes the news, now that’s funny. 
Surely OPEC doesn’t think Iraqi’s band of thieves isn’t going to lose any money...

[Laid Back]

Low oil prices means more deficit in Iraq Budget, it will put more pressure on Iraq to RV their currency.

 

just my opinion 

 

[new york kevin]

30 minutes ago, Laid Back said:

Low oil prices means more deficit in Iraq Budget, it will put more pressure on Iraq to RV their currency.

 

just my opinion 

 

It should Laid Back, it should put the last straw on the RV camels back . Then ba boom a value on the IQD , then maybe floatmas. To be the doubting Thomas here (Sorry in advance) many other things should have done that already too. Their non-compliance with OPEC limitations will help their budget, and wreck the foundations of OPEC+ . I just hope OPEC+ doesn't launch reprisals against them in any way . Say from in country Iranian proxies, and Maliki sympathiesers . 

[new york kevin]

Laid Back and others. All of this may have other untold ramifications particularly if the Russian CB predictions , and SEPARATELY my POTUS Trump statements that the ppb may get to $25/barrel in 2020. Even more pressure on the GOI and CBI to RV before then, so they can have a internationally traded currency and invest in the West just like Saudi Arabia does to supplement their budget.

[Laid Back]

2 hours ago, new york kevin said:

It should Laid Back, it should put the last straw on the RV camels back . Then ba boom a value on the IQD , then maybe floatmas. To be the doubting Thomas here (Sorry in advance) many other things should have done that already too. Their non-compliance with OPEC limitations will help their budget, and wreck the foundations of OPEC+ . I just hope OPEC+ doesn't launch reprisals against them in any way . Say from in country Iranian proxies, and Maliki sympathiesers . 

 

2 hours ago, new york kevin said:

Laid Back and others. All of this may have other untold ramifications particularly if the Russian CB predictions , and SEPARATELY my POTUS Trump statements that the ppb may get to $25/barrel in 2020. Even more pressure on the GOI and CBI to RV before then, so they can have a internationally traded currency and invest in the West just like Saudi Arabia does to supplement their budget.

Thanks for your well thought comment NYK,

I agree with you my friend.

Wishing you and your family a Merry Christmas and a Happy 2020

Go RV Sooner than later

Go $1:1

 

[new york kevin]

Thank you Laid Back, That was very nice of you to say . May God bless you and yours this Christmas .

[blueskyline]

 

l

Saudis, Kuwait Near End to Spat Over Shared Oil Fields; Resolution of five-year dispute would be success for Saudi energy minister Abdulaziz bin Salman

1:41pm ET 12/22/2019 Editor's Picks

Mentioned in article

CVX

 

 

 

By Benoit Faucon and Summer Said

Saudi Arabia and Kuwait are this week set to end a five-year dispute over oil fields in a territory shared between the two countries, people familiar with the matter said Sunday, paving the way for the return of half a million barrels a day of output.The move would be a success for new Saudi energy minister Abdulaziz bin Salman, who has spent years trying to resolve differences over land and environmental rights in what is known as the neutral zone, the contested strip of oil-rich land between the two countries.The fields, which normally produce about 500,000 barrels of crude oil a day, were shut down in late 2014 because of disputes over land-use and environmental permits.The deal could still fall through at the last minute and the two countries, which reached a preliminary agreement in October, are unlikely to restart production immediately, the people familiar with the matter said.The return would be gradual and would be offset by output reductions in other oil fields to comply with cuts agreed upon with other producers, they said.In early December, Prince Abdulaziz headed a pact with the Organization of the Petroleum Exporting Countries and its Russia-led allies to deepen production cuts to 1.7 million barrels a day.The negotiations to reopen the neutral zone have been backed by the U.S., which wants to ensure abundant quantities of oil remain available to make up for sanctioned Iranian and Venezuelan oil.U.S. oil company Chevron Corp., which operates an onshore field in the neutral zone, said it continues to monitor the situation. "Saudi Arabian Chevron remains committed to the region and is focused on supporting operational activities to maintain readiness for a production restart when the time comes," Chevron said.Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com

[yota691]

Agency: Saudi Arabia and Kuwait sign an agreement on the divided zone on Tuesday

Emoji picture

 December 22, 2019 08:49 PM

Direct: Saudi Arabia and Kuwait are preparing to sign a final agreement, next Tuesday, in Kuwait to resume oil production from the divided zone fields .

This came, according to what two sources announced to "Reuters" news agency, on Sunday, noting that the two countries had stopped producing joint fields in the divided zone more than three years ago.

The agency noted that this decision contributed to reducing production by 500 thousand barrels per day, or the equivalent of 0.5 per cent of global oil supplies .

Bloomberg News, citing one of its sources, said earlier that the agreement reached after months of intense negotiations is not final until it is signed by both sides .

The agency indicated that the Khafji field, one of the two fields in the divided zone, could start production immediately, while the Wafra field needs a period of 3 to 6 months .

The Kuwaiti Minister of Oil, Electricity and Water, Khaled al-Fadil, said after the 103rd meeting of the Organization of Arab Petroleum Exporting Countries (OPEC), which his country is hosting today, that the meetings are still continuing with the Saudi side regarding the return of oil production in the divided region, hoping to reach an agreement in the near future.

[yota691]

Kuwaiti Ali bin Sabt, Secretary General of "OAPEC"

THE ECONOMY NOW

Now - App  December 22, 2019, 6:35 pm 241 views0

 

 

 

 

The Council of Ministers of the Organization of Arab Petroleum Exporting Countries (OAPEC) announced in its 103rd meeting held in the country today the selection of Kuwait’s candidate, Ali Bin Al-Sabt, as the new secretary-general of the organization.

The Bahraini Oil Minister, Sheikh Mohammed Al-Khalifa, said in a press statement today, Sunday, after concluding the meeting, that it was agreed to hold the next meeting of the Organization's Council of Ministers in Kuwait on December 13, 2020.

The caliph, who is also the president of the current session of the organization (OAPEC) 2019, stated that the minutes of the hundredth meeting of the organization’s council of ministers were approved in addition to adopting the estimated budget project for the organization “the General Secretariat and the judiciary” for the year 2020.

He said that a new office had been appointed as the organization's auditor for the General Secretariat and the Judiciary for the year 2020.

He added that he decided to entrust the executive office with submitting a plan to activate and develop the organization’s role, to be presented to the cabinet meeting and for the General Secretariat to provide the required support to the executive office to carry out its tasks during the year 2020.

He explained that he also decided to extend the period during which the Republic of Iraq was entrusted with supervising the Arab Oil Institute for training for a period of two years, starting from January 2020.

He pointed out that the People's Democratic Republic of Algeria will assume the presidency of the next session of the Council of Ministers and the executive office of the organization for a period of one year, starting January 1, 2020.

He added that the meeting reviewed a number of topics and studies carried out by the General Secretariat of the organization, as well as the role of the institutions emanating from the organization and the OAPEC Department for Scientific Research in the fields of oil and gas, where the first position was withheld and the award was granted the second place for research submitted by the Kingdom of Bahrain.

 

[ronscarpa]

1 hour ago, yota691 said:

Kuwaiti Ali bin Sabt, Secretary General of "OAPEC"

He explained that he also decided to extend the period during which the Republic of Iraq was entrusted with supervising the Arab Oil Institute for training for a period of two years, starting from January 2020.

 

 

Thanks Yota...! 

[Pitcher]

https://oilprice.com/Energy/Energy-General/The-10-Most-Important-Oil-Market-Trends-For-2020.html
 

The 10 Most Important Oil Market Trends For 2020

By Tsvetana Paraskova - Dec 23, 2019, 7:00 PM CST

As a busy 2019 in the oil and gas industry ends, analysts are busy issuing predictions about next year and what they would mean for oil markets and prices.

This year saw a mix of some of the more predictable events—such as OPEC and Russia extending their cooperation pact, twice—and a ‘black swan’ such as the September attacks on Saudi oil facilities which cut off 5 percent of daily global oil supply for weeks.

As black swans are, by definition, unpredictable, analysts focus on predicting the ‘knowns’ in the market for 2020 as they see them at the end of 2019.

There are many factors to watch in oil markets next year, both in the U.S. and globally.

For the sake of simplicity, here are 10 of the most important predictions and factors to watch in the oil and gas industry in the United States and worldwide.

Independent energy analyst David Blackmon has summed up some predictions, concerning mostly the U.S., for Forbes.

And these are:

1) U.S. shale production will continue to grow 

 U.S. shale growth is slowing down, but all analysts and organizations still expect oil supply from the United States to continue to rise in 2020. Growth may be slower, due to reduced capex from drillers, but U.S. will still be the main contributor to non-OPEC supply growth next year.

2) Rig count will remain stable

Despite the fact that the U.S. oil and rig count declined by more than 250 units this year to December 20 compared to the same time last year, the number of active oil rigs last week saw an increase of 18 rigs—the first double-digit growth since the beginning of April, according to Baker Hughes data. Related: Why Hasn’t Hydrogen Gone Mainstream?

3) U.S. oil and LNG exports will continue to rise 

Exports of U.S. oil and liquefied natural gas (LNG) are expected to grow with the increase in infrastructure capacity in 2020.

The United States exported more crude oil and petroleum products than it imported in September 2019—the first month in which America was a net petroleum exporter since monthly records began in 1973, the U.S. Energy Information Administration (EIA) said earlier this month.

Total U.S. crude oil and petroleum net exports are expected to average 570,000 bpd in 2020 compared with average net imports of 490,000 bpd in 2019, according to EIA’s latest Short-Term Energy Outlook(STEO).

4)  Oil and gas prices will remain range-bound in 2020

 Rising production from non-OPEC nations not part of the OPEC+ deal, driven by the U.S., Brazil, and Norway, is expected to keep a lid on oil prices, while OPEC+ cuts and an expected pick-up in global economic and oil demand growth will keep a floor under prices.

5) Sudden supply outages will have smaller impact on oil prices 

Due to the growing non-OPEC supply, unexpected and short-lived outages are likely to have a smaller impact on oil prices than they would have on markets five or ten years ago, analyst Blackmon says.

Case in point—the mid-September attacks on critical Saudi infrastructure sent oil prices soaring—with WTI Crude touching a five-month high of $62.90 a barrel—but just for one day, as slowing demand growth and a protracted trade war weighed on prices.

6)  Bankruptcies in the U.S. shale patch are set to grow 

The number of bankruptcies and companies seeking protection from creditors is expected to rise in 2020, continuing the trend from 2019.

Haynes and Boone estimated at end-September that the U.S. oil and gas industry had 33 filings year to date in September, more than the number of filings in each of 2017 and 2018, at 24 and 28 filings, respectively. 

With reduced capital availability in equity and debt markets, more of the smaller companies could struggle through the next year.

7) U.S. oil and gas mergers & acquisitions are poised to rise 

 A growing number of distressed U.S. oil and gas firms and few funding options could mean that the ‘smaller guys’ could be acquired by bigger shale players or the smaller guys could team up to scale operations and cut costs.

Signs of consolidation in U.S. shale have already started to emerge, and the wave is expected to continue in 2020. Related: Bullish Sentiment Remains Despite Oil Price Dip

Shareholders of Callon Petroleum and Carrizo Oil & Gas approved an all-stock merger last week.

Two months ago, Parsley Energy and Jagged Peak Energy announced that Parsley would buy Jagged Peak in an all-stock transaction valued at US$2.27 billion, including Jagged Peak’s debt.

“The inevitable consolidation in the Permian has started and Jagged Peak made a decisive move to team up with the right partner,” said S. Wil VanLoh, Jr., a Jagged Peak director and the founder and CEO of Jagged Peak’s controlling shareholder, Quantum Energy Partners.

In its Q3 2019 Oil & Gas deals insights, PwC said:

“In the quarters ahead, we expect to see more companies merging to create scale, companies continuing to focus on generating positive cash flows and shareholder value, while struggling companies will become more amenable to being acquired or seeking restructuring through bankruptcy.”

Internationally, the key factors to watch in oil markets will be:

😎 How oil demand growth will fare as the U.S.-China trade dispute de-escalates 

Oil prices hit a three-month high on December 13 amid growing optimism of a phase-one trade deal. In the days following the announcement that a phase-one deal had been reached, China removed six chemicals and oil derivatives from its list of tariffed U.S. imports.  

9) How OPEC+ cooperation will proceed after March 2020 

Another key factor to watch is what OPEC and its Russia-led non-OPEC partners will do after March 2020, when the current agreement for deeper cuts expires. The next move by the cartel and its allies will largely depend on how oil demand growth will fare in the typically low-demand growth season in Q1. The move will also depend on how much oil OPEC and friends will have managed to withhold from the market compared to plans—that is, whether all members will have fallen in line and stopped cheating.

10) Sudden supply outages in restive regions 

Oil market participants will continue to monitor developments in Libya and Iraq, which could suddenly tighten the market more than anyone had intended to. 

[Pitcher]

https://oilprice.com/Latest-Energy-News/World-News/This-Country-Just-Produced-Oil-For-The-Very-First-Time.html
 

This Country Just Produced Oil For The Very First Time

By Tsvetana Paraskova - Dec 23, 2019, 10:30 AM CST

Guyana officially joined the ranks of oil producing nations, after ExxonMobil and its partners began oil production offshore the South American country.

ExxonMobil and its partner Hess Corporation launched oil production from the Liza field offshore Guyana ahead of schedule and less than five years after the first discovery of oil, the U.S. supermajor said in a statement.

The first cargo of oil from Guyana is set to be sold within several weeks, while production from Liza Phase 1 is expected to reach full capacity of 120,000 barrels of oil per day (bpd) in coming months, Exxon said.  

“We are proud of our work with the Guyanese people and government to realize our shared long-term vision of responsible resource development that maximizes benefits for all,” Exxon’s chairman and CEO Darren Woods said.

Guyana’s President David Granger declared December 20 “National Petroleum Day” to mark the beginning of the first-ever oil production in the country.

Exxon has been the undisputed leader in exploration success in the newest offshore hot spot. In September, ExxonMobil made another oil discovery offshore Guyana, adding to a previously estimated recoverable resource of more than 6 billion oil-equivalent barrels on the Stabroek Block, just a few months before it begins oil production from the Liza Phase 1 development.

ExxonMobil has made more than a dozen oil discoveries offshore Guyana, which is the supermajor’s key development priority in the coming years together with significantly boosting shale production in the Permian basin in the U.S.

Liza Phase 1 will produce up to 120,000 bpd via the Liza Destiny floating production storage and offloading (FPSO). Exxon has also approved the Liza Phase 2 development, which is expected to begin production of up to 220,000 bpd by the middle of 2022. A third development, Payara, could begin pumping oil as soon as 2023, subject to government approvals, according to Exxon.

[Pitcher]

This is a big story for Exxon and the oil business in general

[Pitcher]

https://oilprice.com/Energy/Energy-General/Oil-Markets-Brace-For-Another-500000-Bpd-Oil-Well-To-Come-Online.html
 

Oil Markets Brace For Another 500,000 Bpd Oil Field To Come Online

By Irina Slav - Dec 23, 2019, 9:00 AM CST

Kuwait and Saudi Arabia could be days from agreeing the restart of oil production from the two fields they share in the so-called neutral zone.

Bloomberg quoted Kuwait’s Oil Minister, Khaled Al-Fadel, as saying during a news conference on Sunday that “We hope that by the end of the year things will be cleared out and things will go back to normal.”

The report is the latest in a series about Kuwait and Saudi Arabia trying to resume production from the neutral zone despite the latest extension and deepening of the OPEC+ oil production cuts.

Two fields in the partitioned zone—Khafji and Wafra—pumped half a million barrels daily until 2015. Operational differences and a worsening in bilateral relations led to the suspension of production during that year. The worsening came as Saudi Arabia renewed Chevron’s concession for Wafra. According to the Kuwaiti side, Riyadh did that without consulting it.

Last year, there was talk about restarting joint production after the United States called on its Gulf allies to increase production to keep rising oil prices from going too high. In September 2018 the Financial Times reported that the two countries were mulling over a restart amid rising oil prices and the matching rise in worry among large oil buyers.

This year reports emerged that negotiations had restarted, with media outlets quoting Saudi Arabia’s then-oil minister Khalid al-Falih as saying he hoped all issued to be settled by the end of the year.

According to a source who spoke to Bloomberg, the resumption of oil production from Khafji and Wafra will not add to global supply because both Kuwait and Saudi Arabia comply with their production quota under the OPEC+ agreement. Even so, any news about the restart of the neutral zone fields would punish prices as all reports so far have.

[yota691]

Oil prices rise after OPEC commitment to reduce production

Economie

2019-12-24 | 04:57

 

 

879 views

Oil prices rose, on Tuesday, in meager trading before Christmas in light of OPEC's commitment to reduce production.

Brent crude rose 6 cents, or 0.08%, to $ 66.47. Whereas, American West Texas Intermediate crude rose four cents, or 0.07%, to $ 60.56 a barrel.

Russian Energy Minister Alexander Novak said in an interview on Monday that OPEC, Russia and the rest of the producers working together to curb production and support prices will continue to cooperate as long as they are "effective and achieve results."

 

 

Novak added that cooperation with the Organization of Petroleum Exporting Countries (OPEC) will continue as long as the market needs it.

OPEC and other producers agreed in November to extend and increase production restrictions in effect since 2017. The production cut may displace up to 2.1 million barrels per day from the market, or about two percent of global demand.

[yota691]

Saudi Arabia and Kuwait sign the neutral zone division agreement

l 26 minutes ago

 

Signing the neutral zone division agreement

Sky News Arabia - Abu Dhabi

The Kingdom of Saudi Arabia and Kuwait signed, on Tuesday, an agreement annexed to the agreement on the division of the neutral zone and the agreement on the division of the submerged area adjacent to the area divided between the two countries, in addition to a memorandum of understanding between the governments of the two countries related to the procedures for resuming oil production on both sides.

The Kuwaiti Foreign Ministry , in a statement, said that  the agreement was signed and attached on the Kuwaiti side of Sheikh Nasser Mohammad Al- Ahmad Al- Sabah, Minister of Foreign Affairs, and the Saudi side , Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, Minister of Energy. The latter also signed a memorandum of understanding with his counterpart Ali al-Fadil, the Kuwaiti Minister of Oil and Electricity and Water.

The two sides stressed that the signing of the agreement attached to the memorandum of understanding is the embodiment of the fraternal relations distinct and special grouping the two brotherly countries under the leadership of the Emir of Kuwait Sheikh Sabah Al - Ahmad Al - Jaber Al - Sabah , and his brother , the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud , and guidance from Antma, and the Crown Prince of Kuwait Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, and his brother Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince of the Kingdom of Saudi Arabia, Deputy Prime Minister and Minister of Defense. 

The statement added, "This historic achievement was made through the great cooperation between the political, technical and legal work teams from both sides, which made great efforts to achieve the vision of the two leaderships in the two brotherly countries in a manner consistent with the common interests of the two countries and two brotherly peoples."

And the signing ceremony was attended by Ambassador Khalid Sulaiman Al- Jarallah, Deputy Foreign Minister, Prince Sultan bin Saad bin Khalid Al Saud, Ambassador of the Custodian of the Two Holy Mosques in the State of Kuwait, Saudi Arabia and members of the accompanying delegation, the competent committees in both the two countries, as well as senior officials at the State Department.