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
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
OPEC on Wednesday reached an understanding that a crude-oil-production cut is needed to lift petroleum prices, people familiar with the matter said, but the cartel will wait until November to finalize a plan to tackle a supply glut that has lasted longer than expected.The consensus was reached after a 4½ hour meeting in the Algerian capital. It represents the first acknowledgment from the Organization of the Petroleum Exporting Countries that it needed to take action to alleviate an oil-price slump that has wreaked havoc on the economies of oil producers. OPEC, the 14-nation cartel that controls over a third of world oil output, has been producing at record levels as its members compete among themselves for buyers.A person familiar with the matter said the cartel was considering cutting production to between 32.5 million barrels a day and 33 million barrels a day—down from August levels of 33.2 million barrels a day.
Source: OPEC Reaches Understanding on Output Cut – WSJ
Oil producers in the North Sea were supposed to be among the first victims of OPEC’s battle for market share. Instead their high-cost, decades-old facilities are proving surprisingly resilient to the price slump.
Crude oil and condensate output is likely to continue rising in the U.K. North Sea until 2018 as projects that were sanctioned before crude’s plunge four years ago start up, according to estimates by industry consultant Wood Mackenzie Ltd. Even though production dips after that, output by the end of the decade will still be roughly equal to the 2015 level.
Since 2014, the Organization of Petroleum Exporting Countries has pumped without limits and allowed prices to plunge to 12-year lows to squeeze higher-cost rivals. While the strategy is expected to reduce non-OPEC output by 840,000 barrels a day this year, the battle is far from over. The unexpected stamina of areas like the North Sea, where operators have proved adept at keeping the taps open to keep cash flowing, is adding to the global glut and keeping prices lower for longer.
Source: Against All Odds, North Sea Proves Resilient to Oil-Price Slump – Bloomberg