OPEC is pumping out more oil than at any time in recent history.
The Organization of Petroleum Exporting Countries produced nearly 32.9 million barrels of oil a day in June, according to its monthly statistical bulletin.That’s 260,000 barrels per day more than in May, an increase of about 1%. Monthly OPEC crude production averaged just under 32.6 million barrels per day between January and May.
Source: OPEC oil production rises sharply in June – Jul. 12, 2016
The Organization of the Petroleum Exporting Countries (OPEC) will hold its next ministerial meeting Thursday in Vienna. Expect much ado about nothing.With Saudi Arabia and Iran locked in continuing geopolitical rivalry, OPEC probably won’t come to an agreement to change its oil output targets. Even if it does, however, history suggests that such agreements are largely pointless.Some OPEC members, such as Algeria, Iraq and Venezuela, will want the organization to do what cartels do: constrain supplies and raise the world price of oil. But OPEC won’t meaningfully reduce oil supplies. It can’t. The organization has no way of enforcing the collective cooperation necessary to move the markets.
Source: At this week’s OPEC meeting, expect much ado about nothing – The Washington Post
OPEC’s oil output rose in April to close to the highest level in recent history, a Reuters survey found on Friday, as production increases led by Iran and Iraq more than offset a strike in Kuwait and other outages.Top exporter Saudi Arabia, however, made no major change to output, the survey found, despite the kingdom hinting it could boost supply after OPEC and non-member nations failed to agree to freeze output at a meeting on April 17.Oil LCOc1 has rebounded more than 75 percent from a 12-year low in January to reach $48 a barrel, helped by the freeze initiative and signs that lower prices are starting to curb higher-cost supply, despite high inventories and other persistent reminders of a glut.”The market is massively oversupplied,” said Eugen Weinberg, analyst at Commerzbank in Frankfurt. “This rally doesn’t have strong legs.”
Source: OPEC oil output near record high in April as Iran, Iraq growth offsets outages: Reuters survey | Reuters
Negotiations in Doha between OPEC members and other oil producers ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices.The summit in the Qatari capital, which dragged on for more than ten hours beyond its initially scheduled conclusion, finished with no final accord. Discussions stumbled after Saudi Arabia wouldn’t agree to any accord unless it included Iran, which wasn’t present at the meeting, according to a person familiar with knowledge of the matter.“Given the expectations ahead of Doha, the failure to reach a freeze agreement is likely to cause an oil market selloff,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former White House official. “The fact that Saudi Arabia seems to have blocked the deal is an indicator of how much its oil policy is being driven by the ongoing geopolitical conflict with Iran.”Sixteen nations representing about half the world’s oil output gathered in the Qatari capital in a bid to stabilize the global market, the first significant attempt at coordinating oil output between the Organization of Petroleum Exporting Countries and nations outside the group in 15 years. There were significant hurdles to any deal after Saudi Arabia’s Deputy Crown Prince said the kingdom wouldn’t agree to restrain its production without commitments from other major producers including Iran — which has ruled out freezing for now.
Source: Oil-Freeze Talks End in Failure Amid Saudi Demands Over Iran – Bloomberg
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Tagged Doha, OPEC
Reports from Qatar’s capital Doha, say the problem is tension between Saudi Arabia and Iran.The agenda for the meeting is whether to freeze production levels.Iran has consistently refused to take such steps but Saudi officials have at times appeared willing to take such action only if Iran were to as well.The meeting is a response to the fall in prices which began in June 2014. The price is now less than half what it was then, though in the last few weeks it has risen from its lowest levels.Most members of the exporters’ group Opec, together with some other oil producers, are meeting in Doha to discuss freezing output.No cuts in other words, just a commitment to no more increases.
Source: Oil exporter talks hit difficulties in Doha – BBC News
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Tagged Doha, OPEC
OPEC delegates said there were no plans to hold talks to cut production after Russia’s energy minister said his country was willing to meet with the group next month to coordinate output policy. Alexander Novak said in St. Petersburg that Russia would be willing to discuss output levels with the Organization of Petroleum Exporting Countries, Interfax reported on Thursday. Four OPEC delegates said they had not heard yet of any plans for talks. The group’s next scheduled meeting is in June.
Source: OPEC Delegates Say No Plan for Meeting After Russia Floats Talks – Bloomberg Business
OPEC pumped more oil in November than in any month since late 2008 and forecast little increase in demand for its crude next year, pointing to a larger supply surplus even as low prices hurt rival producers. The Organization of the Petroleum Exporting Countries in a report also forecast supply from non-member countries will fall more sharply next year, which would suggest its strategy, reaffirmed last week of defending market share, is working. OPEC’s report follows an acrimonious OPEC meeting on Dec. 4, where it rolled over a policy of pumping crude to safeguard market share, despite oil prices LCOc1 that have more than halved to $40 a barrel in 18 months due to excess supply.
Source: OPEC points to larger 2016 oil surplus as group’s output hits multi-year high | Reuters
The global oil surplus will persist at least until late 2016 as demand growth slows and OPEC shows “renewed determination” to maximize output, according to the International Energy Agency.
The Organization of Petroleum Exporting Countries, by effectively dropping production limits at its Dec. 4 meeting, is displaying hardened resolve to maintain sales volumes even as prices fall in an oversupplied market, the agency said Friday in its monthly report. While its policy is hitting rivals, triggering the steepest drop in non-OPEC supply since 1992, world oil inventories will likely swell further once Iran restores exports on the completion of a deal to lift sanctions, it said.
Source: IEA Sees Oil Glut Lasting to Late 2016 as OPEC Keeps Pumping – Bloomberg Business
OPEC’s new free-for-all production stance could lift the lid on millions of barrels of additional crude supply next year. “Everyone does whatever they want” now that the Organization of Petroleum Exporting Countries has effectively abandoned its formal production target, Iranian Oil Minister Bijan Namdar Zangeneh said after the group met on Friday. What Iran wants is to revive exports by about 1 million barrels a day when sanctions are removed next year. It’s not the only member with potential to swell the global oil surplus, with millions of barrels of capacity lying unused under the sands of Saudi Arabia and Libya. Bijan Namdar Zanganeh Photographer: Lisi Niesner/Bloomberg “It means more OPEC oil next year,” Jamie Webster, a Washington-based oil analyst for IHS Inc., said of the organization’s Dec. 4 decision. “OPEC is not cutting. With Iran looming, as well as largely only upside risk for Libya, the smart money is on more, and not less, production.”
Source: OPEC Unshackled From Quota Could Add Millions of Barrels in 2016 – Bloomberg Business
The average price of crude sold by OPEC fell below $40 a barrel for the first time 2009, underscoring the financial cost of the group’s strategy to defend its market share.
The daily OPEC Basket Price fell to $39.21 a barrel on Nov. 13, according to an e-mail on Monday from the organization’s secretariat in Vienna. The basket, an average of export grades from each of the group’s 12 members, typically trades below international oil futures as some OPEC nations pump denser or higher-sulfur crude that’s less profitable to refine.
Source: OPEC Export Price Falls Below $40 for First Time Since 2009
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