OPEC’s resolve to stick to promised supply cuts stumbled in June, the sixth month in its long-haul gambit to erode a world oil glut and boost prices. Total compliance within OPEC slipped below 100 percent, back to levels seen in February, dragged down by rising production in Angola, Iraq and Saudi Arabia. Meanwhile, a parallel effort by non-OPEC nations including Russia improved.
Source: OPEC Quietly Opened the Taps in June
Nigerian President Muhammadu Buhari is eyeing an increase to his country’s oil production to 2.2 million bpd, the volume it had pumped before militant attacks in the Niger Delta started crippling the country’s output and exports in early 2016.Presenting next year’s budget in Parliament, Buhari said he was willing to restore the 2.2-million-bpd production level—a statement that is probably cringeworthy for OPEC, who is hard-selling the cuts to the volatile markets, and who had exempted Nigeria from the collective cuts deal to curb its output to 32.5 million bpd, effective in January.“We must all come together” to see peace in the Niger Delta, Reuters quoted President Buhari as saying in Parliament.At the beginning of 2016, Nigeria’s oil production was some 2.1 million bpd, but scores of militant attacks on oil infrastructure in the delta has dragged down production, which was around 1.5 million bpd in August.
Source: Post OPEC Deal: Nigeria Plans To Increase Oil Output By 500,000 Bpd | OilPrice.com
U.S. shale oil producers will increase their output if oil prices hit $60 a barrel, meaning OPEC will have to walk a fine line if it curtails production to prop up prices, the head of the International Energy Agency (IEA) said.OPEC members are due to meet in Vienna at the end of the month to push through the first output limiting deal since 2008.”If this decision pushes the prices up (to) around $60 dollars, we may well see a significant increase from shale oil from the U.S.,” Fatih Birol told Reuters on Wednesday.
Source: IEA expects U.S. shale output rise if OPEC pushes oil to $60 – Business Insider
Ed Morse, the head of commodity research at Citigroup, believes that OPEC and Russia may reach an oil production reduction agreement. The price of oil has dropped over the last few days after OPEC failed to agree on country quotas during their October 28-29 meeting in Vienna. Morse stated that output will need to be cut by at least 1 million barrels per day because of Libya’s and Nigeria’s recent production increases. Citigroup expects to see higher oil prices next year but believe higher prices will catalyze higher production.
Source: OPEC Output Deal ‘More Likely Than Not,’ Citigroup’s Morse Says – Bloomberg
Libya, Nigeria and Iran who were granted special status by OPEC for the oil production limit deal pumped an additional 400,000 barrels per day in October. An aditional 50,000 barrels were produced by Iraq, who is also asking of expemption from the prodcution limit deal. OPEC as a whole produced 34.0 million barrels per day in October, and increase of 170,000 barrels from September.
Source: OPEC Special-Case Nations Add 450,000 Barrels in Threat to Deal – Bloomberg
Oil prices tumbled Monday amid doubts over OPEC’s proposed output cut, after Iraq signaled it wants to be excluded from the pact.U.S. crude for December delivery recently lost 73 cents, or 1.4%, to $50.12 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, lost 69 cents, or 1.3%, to $51.90 a barrel on ICE Futures Europe.Iraqi oil officials Sunday were reported to have said they wouldn’t scale back output, which currently stands at 4.77 million barrels a day. Iraq is the second largest Organization of the Petroleum Exporting Countries producer after Saudi Arabia, making its commitment to any cut to OPEC’s oil output key.“This shift by OPEC’s second-largest producer could become a deal breaker,” said Tim Evans, analyst at Citi Futures Perspective in New York.
Source: Oil Prices Fall After Iraq Signals Doubts Over OPEC Cut – WSJ
The Russian and Saudi energy ministers met ahead of Opec’s late-November deal, but Saxo Bank head of commodity strategy Ole Hansen says the future for oil remains cloudy.He also discusses how the prospect of a deal struck between Opec and non-Opec members has driven oil higher throughout October.But with few Opec producers in a position to reduce their oil production – Iraq, for instance, says it needs its oil revenues to fight ISIS – Hansen fears that any failure to strike a strong deal may trigger a sharp correction in the market.
Source: Opec failure may trigger sharp crude correction: #SaxoStrats | Videos
OPEC reported an increase in its oil production in September to a multi-year high and raised its forecast for 2017 non-OPEC supply growth, pointing to a larger surplus in the market next year despite the group’s deal to cut output.The Organization of the Petroleum Exporting Countries pumped 33.39 million barrels per day (bpd) last month according to figures OPEC collects from secondary sources, up 220,000 bpd from August, OPEC said in a monthly report on Wednesday.OPEC also raised its forecast of non-OPEC supply next year, saying supply from outside the group would rise by 240,000 bpd, up 40,000 bpd from the earlier forecast, citing a higher forecast for Russia.
Source: OPEC says it raises oil output, despite deal to cut | Reuters
Russia, the world’s largest energy exporter, is ready to join OPEC in limiting oil production with either a freeze or a cut, said President Vladimir Putin.“Russia is ready to join in joint measures to limit output and calls on other oil exporters to do the same,” Putin said on Monday at the World Energy Congress in Istanbul. “In the current situation, we think that a freeze or even a cut in oil production is probably the only proper decision to preserve stability in the global energy market.”
Source: Putin Says Russia Ready to Join OPEC Effort to Limit Oil Supply – Bloomberg
The OPEC meeting held at the International Energy Forum in Algeria lasted over four hours and resulted in a face-saving “understanding” that pushed the hard choices off until November. This is probably enough to fend off falling prices because it will partially appease speculators. Meanwhile OPEC countries have not officially committed to anything but have laid the platform for a potential deal.
Source: Saudi Arabia, Iran, Russia Head Towards Showdown In November
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Tagged OPEC, OPEC meeting, opec oil production, OPEC production, Russia, Russian oil production