Saudi Arabia’s economy will stall this year with growth “close to zero” due to lower oil revenue, the International Monetary Fund said.The fund lowered its 2017 growth forecast to 0.1 percent from 0.4 percent, citing OPEC production cuts, uncertainty over oil prices and the structural reforms the country is undertaking to reduce its reliance on crude, it said in a statement on Friday concluding its Article IV consultation. The IMF also lowered its non-oil growth projection to 1.7 percent from 2.1 percent — compared with actual growth of 0.2 percent in 2016.
Source: IMF Sees 2017 Saudi Growth ‘Close to Zero’ on Oil Prices, Cuts – Bloomberg
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
Any decision to extend OPEC production cuts past June would have to include the continued participation by the non-OPEC members of the November accord, OPEC Secretary General Mohammad Barkindo said on Tuesday.The group held talks in recent days with shale oil producers and hedge fund executives, he said during a media conference at the CERAWeek energy conference in Houston. This is the first time OPEC held bilateral meetings with shale producers and investment funds, Barkindo said.”I think we have broken the ice between ourselves and the industry, particularly the tight oil producers and the hedge funds who have become major players in the oil market,” he said in remarks on the sidelines of the energy conference.OPEC plans to hold an event to consider the impact of oil futures on physical crude markets, he said, without providing details.
Source: Oil output cuts past June must include non-OPEC members: OPEC Secretary General | Reuters
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
Oil prices came under pressure on Monday as Iraq said it wanted to be exempt from an OPEC deal to cut production, though losses were capped by Iran saying it would encourage other members to join an output freeze.Brent crude futures LCOc1 were up 6 cents at $51.84 a barrel by 0413 EDT. U.S. West Texas Intermediate (WTI) crude CLc1 was down 5 cents at $50.80.Iraqi oil minister Jabar Ali al-Luaibi said Baghdad wants to be exempt from any production cut the Organization of the Petroleum Exporting Countries is aiming to achieve.Falah al-Amiri, head of Iraq state oil marketer SOMO, added that Iraq’s market share had been compromised by the wars it has fought since the 1980s.”We should be producing 9 million (barrels per day) if it wasn’t for the wars,” he said.
Source: Oil prices under pressure as Iraq resists joining output cut | Reuters
Posted in Iraq, OPEC
Tagged Iraq, oil, OPEC
Oil traded near $50 as better-than-expected economic data in Europe countered Iraq’s demand that OPEC should exempt it from planned output cuts.Prices rose as much as 0.3 percent in New York. A Purchasing Managers’ Index for manufacturing and services in the euro zone rose to 53.7 in October, the fastest pace since the beginning of this year, IHS Markit said on Monday. Iraq should be exempted from trimming production because it’s embroiled in a war with Islamic militants, Oil Minister Jabbar Al-Luaibi said Sunday in Baghdad. Rigs targeting crude in the U.S. rose for an eighth week, according to Baker Hughes Inc.
Source: Oil Trades Near $50 as Europe Economic Data Counters Iraq Demand – Bloomberg