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OPEC Seen Holding the Line as $40 Crude Looms Over Vienna

It’ll take more than $40 crude to make OPEC change its mind, analysts said before the group’s Dec. 4 meeting in Vienna. In the year since the Organization of Petroleum Exporting Countries chose to defend its market share, and let prices sink, a 44 percent plunge in crude has slashed members’ revenues by almost half a trillion dollars. Undeterred, the group will press on with its strategy to batter rival producers when ministers meet next week, according to 30 analysts and traders surveyed by Bloomberg. Saudi Arabia, OPEC’s biggest member, appears determined to see through its plan to eliminate a supply glut by squeezing out competitors like U.S. shale drillers, even as the resulting price collapse spurs dissent from Venezuela, Algeria and Iran. The kingdom’s tactic is “having the intended effect” as non-OPEC supply heads for its steepest retreat since the fall of the Soviet Union, according to the […]

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Oil Bulls See Little Chance of Help From OPEC as Supply Grows

Hedge funds are betting OPEC won’t do anything next month to keep crude oil above $40 a barrel. OPEC ministers are likely to keep its output quota steady at a meeting on Dec. 4 in Vienna, according to analysts from JBC Energy GmbH and Societe Generale SA. Last November, Saudi Arabia led the group in maintaining production, accelerating a plunge in oil prices. Supply may swell further next year if Iran resumes sales that were halted by sanctions. “We remain at risk of falling into an even deeper hole,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone. “We might be looking for the supply surplus to continue through 2016 and through the first half of 2017.” Money managers’ net-long position in West Texas Intermediate crude fell 17 percent in the week ended Nov. 17 to the lowest in more than two months, […]

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Iran says does not need OPEC permission to increase oil production

Iran’s Oil Minister Bijan Zanganeh attends an extraordinary ministerial meeting of the Gas Exporting Countries Forum (GECF) in Tehran November 21, 2015. Iran’s oil minister said on Saturday Tehran does not need to seek permission from OPEC to increase oil production, state news agency IRNA reported. "To increase Iran’s oil production in the global market after the lifting of sanctions, we don’t need permission from OPEC or any other organization," Iran’s oil minister, Bijan Zanganeh was quoted as saying by IRNA on the sidelines of the meeting of the Gas Exporting Countries Forum (GECF) in Tehran. (Reporting by Bozorgmehr Sharafedin, editing by David Evans)

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Oil Slides as Venezuela Sees Mid-$20 Crude If OPEC Doesn’t Act

Oil fell amid a broader commodity rout while Venezuela predicted prices may tumble to the mid-$20s a barrel unless OPEC tackles the global surplus. West Texas Intermediate futures for January fell as much as 3.3 percent, sliding with industrial metals such as copper, which dropped to the lowest since 2009. Venezuela is urging the Organization of Petroleum Exporting Countries to adopt an “equilibrium price” that covers the cost of new investment in production capacity, Oil Minister Eulogio Del Pino said Sunday. Oil has slumped about 46 percent over the past year amid speculation a global glut will persist as OPEC continues to pump above its collective quota. The 12-member group meets Dec. 4 in Vienna to discuss the production ceiling as Iran signals its intention to boost output by 1 million barrels a day within five to six months of economic sanctions being removed. “The structure of the oil […]

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Saudi Oil Minister Says OPEC With Others to Stabilize Market

Saudi Arabia is working with other OPEC members and producers from outside the group to stabilize the market, Saudi Oil Minister Ali al-Naimi said. The world economy is going through an unstable situation, al-Naimi said. Crude demand is expected to rise by 1 million barrels a day every year in this decade, and the world requires more investments in oil to compensate for decline rates, he said. The decline rate of recovery at the world’s oil fields is at about 4 million barrels a day, he said. “Saudi Arabia is a very reliable supplier. We cooperate with OPEC and non-OPEC countries to stabilize the market,” al-Naimi said at a conference in Manama, Bahrain. “We need billions of dollars to continue exploration and producing oil and to invest in spare capacity to stabilize the market.” Threatened by surging production mainly from North America and Russia, the Organization of Petroleum Exporting […]

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OPEC Targets U.S. Shale, But Hits Canada Instead

A bucket loader digs for oil sands at a mine in this aerial photograph taken near Fort McMurray, Alberta, Canada, on June 4, 2015. OPEC took a swing at U.S. shale and knocked down Canada. Threatened by surging production from North America, the Organization of Petroleum Exporting Countries has been pumping above its quota for 17 months as it seeks to take market share from higher-cost regions. The resulting 60 percent price crash is hitting Alberta harder than Texas. Canadian producers are struggling to cut the cost of extracting bitumen from the oil sands, and their other wells are failing to match the efficiency gains of U.S. rivals, a Bloomberg Intelligence analysis shows. While output keeps rising in the Permian Basin, the largest U.S. shale play, companies are slowing output from wells in Alberta and have shelved 18 oil-sands projects during the downturn, according to ARC Financial Corp. “OPEC […]

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OPEC Delays Long-Term Strategy Amid Rift Over Production

From left to right, Minister of Oil of Iraq, Adil Abd Al-Mahdi, Minister of oil of Iran, Namdar Zangeneh, Venezuela’s Minister for Petroleum and Mining, Asdrubal Chavez J, and Secretary General of the International Energy Forum (IEF), Aldo Flores-Quiroga, and Secretary General of the Energy Charter, arrive to the Organization of the Petroleum Exporting Countries (OPEC) ‘s 6th International seminar at Hofburg Place on June 3, 2015 in Vienna, prior to the OPEC meeting on June 5, 2015. Approval of five-year plan delayed until 2016, delegates said OPEC’s board of governors was unable to agree on the group’s long-term strategy plan and won’t present it to oil ministers when they meet on Dec. 4 in Vienna, two OPEC delegates with knowledge of the matter said. Approval of the plan is delayed until at least the next meeting of the board of governors in 2016, said the delegates, who asked […]

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Agencies: Russia Says OPEC Unlikely To Cut Output At December Meeting

Russian Energy Minister Alexander Novak says he does not expect the Organization of the Petroleum Exporting Countries to take steps to cut oil output at a meeting on Dec. 4, reports Russian news agencies Interfax and TASS. MOSCOW, Nov 13 (Reuters) – Russian Energy Minister Alexander Novak said he does not expect the Organization of the Petroleum Exporting Countries to take steps to cut oil output at a meeting on Dec. 4, Russian news agencies Interfax and TASS reported on Friday. "We are not going, let’s put it like this, to lower oil production volumes," Novak was quoted by TASS as saying. "I consider it unlikely, taking into account the position of the biggest producers," TASS quoted Novak as saying. Novak also reiterated that Russia would not deliberately cut its own oil output. "In general we focus on the total amount laid out in the strategy (of energy sector […]

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OPEC Says Oil-Inventory Glut Is Biggest in at Least a Decade

Surplus oil inventories are at the highest level in at least a decade because of increased global production, according to the Organization of Petroleum Exporting Countries. Stockpiles in developed economies are 210 million barrels higher than their five-year average, exceeding the glut that accumulated in early 2009 after the financial crisis, the organization said in a report. Slowing non-OPEC supply and rising demand for winter fuels could “help alleviate the current overhang,” enabling a recovery in prices, it said. The group’s own production slipped last month because of lower output in Iraq. “The build in global inventories is mainly the result of the increase in total supply outpacing growth in world oil demand,” OPEC’s Vienna-based research department said in its monthly market report. Oil prices have lost about 40 percent in the past year as several OPEC members pump near record levels to defend their market share against rivals […]

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OPEC sees oil surplus shrinking in 2016, but underlines current glut

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC said its oil output fell in October and forecast supply from rival producers next year would decline for the first time since 2007 as low prices prompt investment cuts, reducing a global supply glut. In a monthly report, the Organization of the Petroleum Exporting Countries said it pumped 31.38 million barrels per day (bpd) last month, down 256,000 bpd from September. That is the first decline since March, according to OPEC figures. The forecast of a decline in supply outside OPEC, if realized, would be a further indication the group’s strategy is working. OPEC last year abandoned a longstanding policy of propping up prices and instead raised output, seeking to recover market share taken by higher-cost rival production. Oil is trading at around $45 a barrel, […]

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OPEC Oil Output Falls on Iraqi Export Woes

OPEC’s output dropped sharply in October. A sharp drop in Iraqi oil production has driven OPEC’s overall output down, as the seemingly relentless ascent of the country’s energy industry started feeling the strain from security problems and insufficient investments. Iraq’s production fell by 195,400 barrels a day in October to just over 4 million barrels a day. The overall output is still near record highs for Iraq, but the steep monthly drop offered fresh evidence that the country’s surprising ramp up over the past year—when oil prices plunged—may not be sustainable. “In a low-price environment, we are approaching peak capacity from Iraq,” Olivier Jakob, head of Swiss oil consultancy Petromatrix, said in a note Thursday. Iraq’s decline was the largest in an overall output fall reported Thursday by the Organization of the Petroleum Exporting Countries in its closely watched monthly market report. The group produced 31.382 million barrels a […]

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OPEC Crude Production Down in October

OPEC has published their OPEC Monthly Oil Market Report with crude only production numbers for October 2015. The charts are “Crude Only” production and are in thousand barrels per day. OPEC 12 was down 256,000 bpd in October. Secondary Sources OPEC uses secondary sources such as Platts and other agencies to report their production numbers. I find these numbers far more useful than those reported by direct communication with the OPEC countries. Those numbers are political and usually highly inaccurate. Algeria peaked in November 2007 – 2008 and has been in a steady decline since that point. Angola has been holding steady since peaking in 2008 and 2010. Ecuador appears to have peaked this year. It is likely production will be down, but only slightly, next year. Iran appears to be poised to increase production when sanctions are lifted. But don’t expect too much very soon. After years of […]

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Venezuela says ‘informal’ OPEC chat planned before December meeting

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. Oil ministers of OPEC nations will hold "candid, informal" talks on Dec. 3, a day before the group’s formally scheduled meeting in Vienna, Venezuela’s oil minister said on Wednesday, adding the idea was suggested by Saudi Arabia. "It’s an informal meeting where we’re going to speak in a very frank way about the market situation, and we’re going to speak frankly about production levels in each country," Venezuelan Oil Minister Eulogio del Pino told Reuters in a phone interview. Price-hawk Venezuela has been pushing for OPEC action to boost prices. OPEC kingpin Saudi Arabia, however, has rebuffed those calls and is instead focused on defending market share. The informal meeting will be held at the suggestion of Saudi Arabia’s oil minister Ali al-Naimi, del Pino said. "After […]

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OPEC Said to Consider New Output Ceiling as Indonesia Rejoins

The Organization of Petroleum Exporting Countries is considering raising its official production target at its next meeting on Dec. 4 to take into account new member Indonesia, according to two OPEC delegates. The production ceiling may be raised by 1 million barrels a day to 31 million barrels, the delegates said, asking not to be identified because the discussions are private. A change doesn’t imply higher production because OPEC itself said it pumped 31.57 million barrels a day in September. The Southeast Asian nation re-entry after a break of almost seven years comes at a time when OPEC has abandoned its traditional role in supporting prices as it seeks to defend market share against supplies from U.S. shale drillers and other rivals. OPEC will now have 13 members, led by Saudi Arabia, the world’s largest crude exporter. Indonesia’s suspended its membership in 2009 after becoming a net oil importer. […]

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OPEC’s Oil Output Strategy Seen Potentially Backfiring

OPEC’s unwillingness to limit its oil output could help usher in a sustained period of low prices and more pain for its members’ budgets, the International Energy Agency said Tuesday. The comments by the Paris-based monitor of energy trends echoed criticism from within and outside the group over a Saudi-led strategy of keeping the taps open to put pressure on higher-cost rivals such as the U.S. Members of the Organization of the Petroleum Exporting Countries including Venezuela, Iran and Algeria are being badly pinched by fallen oil prices and have agitated for production cutbacks to push them back up. Oil producers that aren’t members of the group are complaining as well: On Monday, Omani oil minister Mohammed Bin Hamad Al Rumhy called current oil production levels “irresponsible” and said the group had contributed to low oil prices. “This is a commodity that if you have 1 million barrels a […]

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OPEC Challenges Shale Afresh as Iraq Crude Floods U.S. Market

OPEC’s latest challenge to U.S. shale oil producers would be about two miles long, lined end to end, and weigh almost 3 million metric tons. It’s due to reach American ports this month. Iraq, the fastest-growing producer within the 12-nation group, loaded as many as 10 tankers in the past several weeks to deliver crude to U.S. ports in November, ship-tracking and charters compiled by Bloomberg show. Assuming they arrive as scheduled, the 19 million barrels being hauled would mark the biggest monthly influx from Iraq since June 2012, according to Energy Information Administration figures. The cargoes show how competition for sales among members of the Organization of Petroleum Exporting Countries is spilling out into global markets, intensifying competition with U.S. producers whose own output has retreated since summer. For tanker owners, it means rates for their ships are headed for the best quarter in seven years, fueled partly […]

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OPEC Is Likely to Change Course, IEA Says

OPEC is unlikely to sustain its practice of pumping flat out in a fight for global market share and will limit output in a scenario that sends oil prices to $80 a barrel by 2020, the International Energy Agency said Tuesday. Oil prices plunged last year when the Organization of the Petroleum Exporting Countries, and its de facto leader Saudi Arabia, abandoned its traditional role of propping up the market through supply cuts and began ramping up production instead. Prices haven’t recovered, sitting at about $47 a barrel Tuesday, down from $114 a barrel in June 2014. “Many OPEC producers will lose a substantial amount of revenue which will lead them to look at their policies again,” said Fatih Birol, the executive director of the IEA, a Paris-based group that monitors energy trends and data for industrialized nations. Mr. Birol’s comments were part of the release of the IEA’s […]

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OPEC Chief Sees Oil Market Balanced by 2016 on Growing Demand

Global demand for crude will bring more balance to the oil market as soon as next year, according to OPEC Secretary General Abdalla El-Badri and Pulitzer Prize-winning author and energy consultant Daniel Yergin. Demand will rise by about 17 million barrels a day to almost 110 million barrels a day by 2040, with 70 percent of the growth to come from Asia, the head of the Organization of Petroleum Exporting Countries said at an event in Doha. The oil market will rebalance in 2016 or 2017, as demand grows between 1.2 million barrels a day and 1.5 million barrels a day through 2020, Yergin, vice chairman of consultants IHS, said in a speech in Abu Dhabi. “The expectation is that the market will return to more balance in 2016,” El-Badri said Monday. “We see global oil demand maintaining its recent healthy growth. We see less non-OPEC supply. And we […]

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OPEC’s Oil Output Strategy Seen Potentially Backfiring

OPEC’s unwillingness to limit its oil output could help usher in a sustained period of low prices and more pain for its members’ budgets, the International Energy Agency said Tuesday. The comments by the Paris-based monitor of energy trends echoed criticism from within and outside the group over a Saudi-led strategy of keeping the taps open to put pressure on higher-cost rivals such as the U.S. Members of the Organization of the Petroleum Exporting Countries including Venezuela, Iran and Algeria are being badly pinched by fallen oil prices and have agitated for production cutbacks to push them back up. Oil producers that aren’t members of the group are complaining as well: On Monday, Omani oil minister Mohammed Bin Hamad Al Rumhy called current oil production levels “irresponsible” and said the group had contributed to low oil prices. “This is a commodity that if you have 1 million barrels a […]

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OPEC Rift Exposed as Oman Oil Minister Calls Group ‘Irresponsible’

ABU DHABI—Discontent with the Organization of the Petroleum Exporting Countries spilled into the open Monday, when Oman’s oil minister called current oil production levels “irresponsible” and blamed the group for contributing to low oil prices. “This is a commodity that if you have one million barrels a day extra in the market, you just destroy the market,” said Mohammed Bin Hamad Al Rumhy, whose country produces oil but isn’t a member of OPEC. “We are hurting, we are feeling the pain and we’re taking it like a God-driven crisis. Sorry I don’t buy this, I think we’ve created it ourselves.” Mr. Rumhy’s comments came at a conference in Abu Dhabi as he shared a stage with Suhail al Mazrouei, the United Arab Emirate’s top oil official, who is a top advocate of the producer group’s strategy. The remarks also reflect the pressure on OPEC from less wealthy members like […]

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OPEC ready to make needed investments to respond to future needs: secretary general

OPEC secretary general Abdullah al-Badri listens during a news conference after a meeting of OPEC oil ministers in Vienna, Austria, June 5, 2015. OPEC Secretary General Abdullah al-Badri said that despite uncertainties, OPEC members were ready to make the necessary investments to respond to the world’s future energy needs. Badri also said that a wave of project cancellations and deferrals in the industry was a "clear demonstration that wide price fluctuations have a detrimental effect on investments and can sow the seeds of future instability", in a statement on the International Energy Forum’s website. The secretary general said he saw Asia oil demand rising to almost 46 million barrels per day by 2040, an increase of nearly 16 million barrels per day from 2015. Oil-related investment requirements between now and 2040 are estimated at about $10 trillion, he said. (Reporting by William Maclean ; Writing by Yara Bayoumy)

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OPEC Members at Odds Over Group’s Long-Term Goals

The Organization of the Petroleum Exporting Countries has delayed completing its internal report on long-term strategy as tensions deepen among members over an extended oil-price slump, according to delegates to the group. The disagreements could set for the stage for a tense OPEC meeting next month, when oil ministers from the group’s 12 members will gather in Vienna to decide on production levels. Prices for Brent crude, the international benchmark, have fallen to below $50 a barrel after years above $100, blowing a hole in the national budgets of OPEC members that rely heavily on oil exports. OPEC’s long-term strategy report was expected to be made final Wednesday at an OPEC staff-level meeting in Vienna before being submitted for ministerial approval next month. But attendees at the meeting said OPEC delegates—who represent national governments with competing interests—couldn’t agree on language defining the group’s long-term mission. Algeria, Iran and Venezuela—which […]

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OPEC unlikely to cut in December without non-OPEC -Gulf delegate

A table with OPEC logo is seen during the presentation of OPEC’s 2013 World Oil Outlook in Vienna , November 7, 2013. OPEC is likely to stick to its no-cut oil output policy when it meets in December if major producers from outside the group are not willing to help in reducing supplies, a senior Gulf OPEC delegate said on Thursday. Oil prices are under pressure as crude and refined products inventories are higher than the five-year average, but that is likely to improve next year, the Gulf delegate told Reuters. Demand for crude is healthy and it expected to remain strong next year despite concern over China’s economy, the delegate said. "It is a difficult situation for OPEC to cut alone then others increase their production," the delegate said. "If non-OPEC did not cooperate, OPEC is likely to keep its policy unchanged." Saudi Arabia led a shift by […]

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Exclusive: OPEC confidential report sees market share squeeze to 2019

The OPEC logo is seen at OPEC’s headquarters during a meeting of OPEC oil ministers in Vienna, Austria, June 5, 2015. Global demand for OPEC’s crude oil will remain under pressure in the next few years, the producer group said in an internal report, potentially fuelling a debate on its strategy of defending market share rather than prices. The draft report of OPEC’s long-term strategy, seen by Reuters, forecasts crude supply from OPEC – which has an output target of 30 million barrels per day (bpd) – falling slightly from 2015’s level until 2019, unless output slows faster than expected in rival producers. OPEC governors, official representatives of the 12 members of the Organization of the Petroleum Exporting Countries, met at the group’s Vienna headquarters on Wednesday to approve the final draft of the report. The 44-page report, marked "CONFIDENTIAL," includes an annex containing comments from two members, Iran […]

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OPEC’s big favor to the world of oil

OPEC’s spare production capacity is estimated by the US Energy Information Administration at 1.54 million b/d, a mere 180,000 b/d above the level reached in 2008 when oil prices hit their record high. But don’t panic! Oil inventories are at very high levels. The International Energy Agency puts global oil stocks at 147 million barrels, which it notes could notionally deliver 1.6 million b/d for just over 90 days in the event of a major supply disruption. Meanwhile, the North Dakota Department of Mineral Resources reports that the number of drilled but uncompleted wells in the state hit 993 in August. According to Platts unit Bentek Energy, these wells if brought on-stream would add 591,000 b/d to Bakken crude production (again, notionally). This represents a major change in the oil market. Spare capacity is no longer solely held by OPEC, but is split between the Middle East, principally Saudi […]

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Exclusive: OPEC squabbles over oil price, maximizing revenue in strategy report

The Organization of the Petroleum Exporting Countries (OPEC) logo is pictured at its headquarters in Vienna June 10, 2014. Internal OPEC squabbles are on the rise as members argue about the need to support a fair oil price and boost revenues just as they feel more pain from low crude prices, an internal OPEC report seen by Reuters this week showed. A draft report of OPEC’s long-term strategy (LTS) carries annotations by Iran, Algeria and Iraq, and suggestions from Iran and Algeria for measures to support prices such as a price target or floor and a return to OPEC’s quota system. Oil prices have more than halved to below $50 a barrel since June 2014 in a drop that deepened after the Organization of the Petroleum Exporting Countries in 2014 changed strategy to protect market share, rather than cut output to prop up prices as it did in the […]

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OPEC October oil output falls led by Saudi, Iraq: Reuters survey

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC oil output has fallen in October from the previous month, a Reuters survey found on Friday, as declines in top producers Saudi Arabia and Iraq outweighed higher supply from African members. The drops are not indicative of deliberate supply cuts to prop up prices, sources in the survey said, and the Organization of the Petroleum Exporting Countries is still pumping close to a record high as major producers focus on defending market share. OPEC supply has fallen in October to 31.64 million barrels per day (bpd) from a revised 31.76 million in September, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants. With one day left in October, the final figures could be revised. Even so, OPEC […]

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OPEC Oil Output Rises in October Led by Libya, Saudi Arabia

OPEC crude production climbed this month, led by gains in Libya and Saudi Arabia. Output by the Organization of Petroleum Exporting Countries rose by 74,000 barrels to 32.211 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 89,000 barrels higher to 32.137 million a day because of changes to the Iraqi, Ecuadorean and Emirati estimates. OPEC has been boosting supply as it seeks to force higher-cost producers to cut output. The 12-member group agreed on June 5 to retain its collective output target of 30 million barrels a day, which it has exceeded since June 2014. "This data shows that the battle for market share is far from over," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “There’s a complete lack of coordination and cooperation […]

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OPEC Is About to Crush the U.S. Oil Boom

After a year suffering the economic consequences of the oil price slump, OPEC is finally on the cusp of choking off growth in U.S. crude output. The nation’s production is almost back down to the level pumped in November, when the Organization of Petroleum Exporting Countries switched its strategy to focus on battering competitors and reclaiming market share. As the U.S. wilts, demand for OPEC’s crude will grow in 2015, ending two years of retreat, the International Energy Agency estimates. While cratering prices and historic cutbacks in drilling have taken their toll on the U.S., OPEC members have also paid a heavy price. A year of plunging government revenues, growing budget deficits and slumping currencies has left several members grappling with severe economic problems . The fact that the U.S. oil boom kept going for about six months after the group’s November decision also means OPEC has so far […]

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OPEC, non-OPEC experts to talk, but unlikely to cooperate on cuts

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. A meeting of OPEC and non-OPEC oil market experts this week is unlikely to increase the prospect of joint co-operation on supply curbs or show much support for Venezuela’s proposed price band, OPEC delegates and analysts said. The Organization of the Petroleum Exporting Countries has invited eight non-member countries including Russia for talks on the market at its Vienna headquarters on Wednesday. OPEC’s own meeting to set policy is not until Dec. 4. Non-OPEC producers have refused to work with OPEC in cutting supply to reduce a surplus that has prompted prices to sink to below $50 a barrel from $115 in June 2014. In turn, OPEC has refused to limit supply alone and many members have raised output. Cash-strapped member Venezuela is nonetheless pushing for OPEC […]

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OPEC Brings Oil Price War Home in Pursuit of Asia’s Cash

When it comes to deciding how much to charge Asian oil buyers, OPEC members are showing little regard for tradition. Suppliers from the Organization of Petroleum Exporting Countries have long moved in lockstep, raising or lowering prices in tandem. Now, Kuwait is undercutting Saudi Arabia by the most on record and Iraq is also selling its oil more cheaply than the group’s biggest member. Qatar is pricing cargoes at the biggest discount in 27 months to competing crude from the U.A.E.’s Abu Dhabi. While the group that accounts for about 40 percent of global oil supplies maintains a collective strategy of flooding the market with crude, the semblance of unity has vanished when setting monthly selling prices. With Asia forecast to account for most of the growth in global oil demand this year, competition for the region’s buyers is trumping historical allegiances. “It’s a full-on fight for market share […]

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OPEC accepts Indonesia’s request to reactivate membership

The Organization of Petroleum Exporting Countries has accepted Indonesia’s request to reactivate the country’s membership. Indonesia formally asked for reinstatement at the cartel’s June ministerial meeting in Vienna (OGJ Online, June 5, 2015) . The Southeast Asian country withdrew from OPEC in 2009 citing growing internal demand for energy, declining crude oil and condensate production in mature fields, and limited investment to increase production capacity. Indonesia had become a net importer of petroleum and other liquids by 2004 after domestic demand exceeded production. Indonesian government officials said that rejoining OPEC will strengthen its cooperation with oil-producing countries, provide greater access to crude oil supplies, and allow the country to be a link between energy producers and consumers. Indonesia currently buys crude oil and petroleum products through third parties or traders and seeks direct access to long-term crude supply contracts through negotiations between OPEC-member national oil companies. Indonesia produced about […]

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Platts: No change from OPEC expected

Platts survey of oil landscape finds few signs OPEC will reverse market course when its members meet in December. Photo by Pattie Steib/Shutterstock LONDON, Oct. 14 (UPI) — A survey from energy reporting group Platts finds few indications the Organization of Petroleum Exporting Countries will cut production for 2016. OPEC said in its latest monthly market report output from member states in September increased by 109,000 barrels per day for an average 31.6 million bpd. Declines elsewhere, however, meant the global oil supply fell by 340,000 bpd to average 94.2 million bpd. According to an emailed report from Platts, however, output from OPEC fell 60,000 bpd because of declines from Saudi Arabia. By OPEC’s own accounting, production from Saudi Arabia showed the largest drop of the 12 member states with 48,000 bpd, according to secondary sources. Platts found a similar drop in Saudi output by referencing information from oil […]

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A $70 oil floor? Fat chance, but OPEC price plan may be first step

An oil pump is seen in Lagunillas, Ciudad Ojeda, in the state of Zulia, Venezuela, March 18, 2015. The safe money for oil traders is betting that Venezuela’s plan to resurrect OPEC’s old price band mechanism, attempting to set a $70 floor for the battered market, will be doomed from the start. Saudi Arabia, the group’s de facto leader, has shown zero interest in returning to a strategy of supporting prices; big producers outside the Organization of Petroleum Exporting Countries, namely Russia, have essentially ruled out cuts. And most analysts say attempting to set a price range is futile, or that the $70 price is unsustainably high, or both. Yet a handful of experts and observers say the proposal – articulated by former oil minister Rafael Ramirez in an interview with Reuters – may be a catalyst for moving away from OPEC’s laissez faire approach to collapsing oil prices, […]

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OPEC Crude Little Change

The OPEC Monthly Oil Market Report is just out with the crude only production numbers for the 12 OPEC countries. The data below is in thousand barrels per day and the last data point is September 2015. OPEC 12 OPEC 12 crude only production was up 109,000 barrels per day in September but that was after the August production numbers were revised down by 82,000 bpd. OPEC crude only production now stands at 31,571,000 pbd. That is just 12,000 bpd above June production but still 100,000 bpd below their peak in July of 2008. Saudi Arabia Saudi Arabia was down 48,000 bpd in September to 10,225,000 bpd. That is 174,000 bpd below their latest peak in June. The big gainer in September was Iraq, up 80,100 bpd in September. That is still 5,000 bpd below their latest peak in July. The UAE hit a new high in September, up […]

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OPEC Sees U.S. Oil Output Dropping Next Year

U.S. oil output will decline in 2016 for the first time in eight years as producers slash spending, the Organization of the Petroleum Exporting Countries said Monday, while the producer group continues pumping at high levels . In its closely watched monthly oil market report, OPEC slashed its U.S. oil production forecast by 280,000 barrels a day next year, to 13.538 million barrels a day, a number that includes natural gas liquids. That would be about 60,000 barrels a day less than in 2015, the first decline since 2008. The finding is consistent with what the U.S. Energy Information Administration said last week, predicting that U.S. crude production would average about 8.9 million barrels a day in 2016, down from 9.2 million barrels a day in 2015. OPEC said lower oil prices were forcing U.S. oil producers to cut spending and causing their wells to deplete faster than expected. […]

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OPEC Sees U.S. Oil Output Falling for First Time in Eight Years

The Permian Basin in Mentone, Texas. U.S. crude output peaked at 9.6 million barrels a day in April U.S. oil production is projected to decrease in 2016 for the first time in eight years, according to OPEC. Total output of crude and natural gas liquids is forecast to fall 0.5 percent to 12.47 million barrels a day next year, the Organization of Petroleum Exporting Countries said in its monthly market report Monday. The decline is being driven by the fall in prices, which has curbed spending, OPEC said. U.S. oil drillers have idled more than half the nation’s rigs since last October, data from oilfield-services company Baker Hughes Inc. shows. "What happens with shale production next year is highly uncertain," Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. "Recent reports on drilling and production justify a pessimistic forecast. It’s not surprising that […]

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OPEC Pumps Most Crude in Three Years as It Lifts Demand Forecast

OPEC pumped the most crude in three years as it predicted stronger demand for its oil in 2016 while supplies elsewhere falter. The Organization of Petroleum Exporting Countries said it pumped 31.57 million barrels a day last month, the most since 2012, according to its monthly market report. OPEC sees production outside the group shrinking by 130,000 barrels a day next year as the U.S. shale boom sputters. “The oil industry has experienced a rapid fall in global upstream spending,” OPEC’s Vienna-based secretariat said. “In 2016, the postponing or canceling of upstream projections will likely continue, resulting in contraction” of supplies. Oil prices have rallied about 10 percent in the past month as drilling cutbacks in the U.S. and reduced energy investment globally suggest the surplus in world oil markets will eventually dissipate. OPEC Secretary-General Abdalla Salem El-Badri said in Kuwait on Monday that the market may be “balanced” […]

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OPEC secretary-general says confident of more balanced oil market in 2016

OPEC Secretary-General Abdullah al-Badri addresses a news conference after a meeting of OPEC oil ministers at OPEC’s headquarters in Vienna November 27, 2014. The secretary-general of the Organization of the Petroleum Exporting Countries said on Sunday that he was confident of seeing a more balanced oil market in 2016. "We need to keep investing, it is essential for our industry…I remain confident that our industry’s best days are yet to come," Abdullah al-Badri told an oil industry conference in Kuwait. He said non-OPEC oil output had contracted recently, and that he did not believe the fundamentals of the market warranted a drop in oil prices. (Reporting by Rania El Gamal; Writing by Andrew Torchia )

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Kuwait oil minister says no calls within OPEC for policy change

Kuwait’s Oil Minister Ali Al-Omair speaks to the media at the opening of the exhibition of the 2nd Kuwait Oil and Gas Show and Conference in Mishref, Kuwait, October 12, 2015. Kuwait’s oil minister said on Monday there were currently no calls from within OPEC to change the oil-producing group’s output policy and that a market exit by high-cost producers could help buoy oil prices in 2016. "Today there are no ideas or demands from the member states to make any big change in OPEC’s decision," Kuwait Oil Minister Ali al-Omair told Reuters, referring to OPEC’s decision in November 2014 to keep output unchanged. "Today there are indications that a lot of high-cost oil production‎ is starting to get out of the market and this will help improve prices," Omair said. He said there were also positive signs regarding global economic growth. "There are signs that world economic growth […]

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OPEC’s Badri worried about investment but says all oil producers must cooperate

OPEC Secretary General Abdalla el-Badri said Tuesday he was concerned about the impact of low oil prices on investment and the consequences for future supply, but insisted that rebalancing world oil markets was the responsibility of all producers and not a burden to be borne by OPEC alone. Badri also predicted that oil prices would rise from current six-year lows of below $50/b in the next few months, although he did not say how much improvement he expected. "We have an overhang of 200 million [barrels] in the market. All of us should work together, OPEC and non-OPEC…all of us have to work together to see how we can get rid of this 200 million barrel overhang," he told the annual Oil & Money conference in London. "I’m really disturbed," he said, referring to the wave of investment cuts announced by oil companies this year in response to the […]

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OPEC Crude Output Falls in September led by Gulf Producers

OPEC crude output fell this month, led by declines in the group’s three-biggest producers. Output from the Organization of Petroleum Exporting Countries fell by 233,000 barrels to 32.048 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 35,000 barrels lower to 32.281 million a day because of changes to the Iraqi, Nigerian and Ecuadorean estimates. Crude futures in London and New York market are down 24 percent this quarter amid speculation that the global supply glut will grow as Chinese economic growth slows. OPEC agreed on June 5 to retain its collective output target of 30 million barrels a day, a level that it’s exceeded for 16 months, according to data compiled by Bloomberg. Brent crude for November settlement rose 19 cents, or 0.4 percent, to $48.42 a barrel on the London-based ICE Futures Europe exchange at […]

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OPEC is winning battle to stimulate gasoline demand: Kemp

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC’s bid to curb production of high-cost oil is taking time to produce results but the organization is already making good progress on its other objective of stimulating fuel demand. In the first half of the year, gasoline deliveries into U.S. local markets jumped by 4.3 percent compared with the same period in 2014, according to the U.S. Energy Information Administration. The United States is the world’s largest gasoline consumer and its gasoline demand accounts for 10 percent of all crude and condensates produced worldwide. In the first six months of 2015, U.S. gasoline consumption rose at the fastest rate since 1985 – another occasion on which the real price of oil halved over 12 months and stimulated demand ( link.reuters.com/xux65w ). U.S. gasoline sales have fallen […]

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Iran Sees Oil Exports Starting to Rise as Early as Late November

GENEVA—Iran expects to be able to increase its oil exports by 500,000 barrels a day by late November or early December with sales to Asia, a top Iranian oil official said Thursday, even before most western sanctions would lift. By mid-2016, Iran expects that its exports will exceed today’s by 1 million barrels a day under that scenario, said Ali Kardor, the chief of investment for the National Iranian Oil Company. “We are ready,” Mr. Kardor said, speaking on the sidelines of a conference here in Geneva promoting business ties between Europe and Iran. The timeline laid out by Mr. Kardor is faster than many analysts and market participants believe Iran is capable of achieving. Iran has been the target of crippling sanctions from much of the western world since 2012 over the Persian Gulf country’s attempts to create a nuclear program. Persian Gulf members of the Organization of […]

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OPEC’s Family Feud

Photo illustration: 731; Photographs: Alamy When Venezuelan Oil Minister Juan Pablo Pérez Alfonso resigned in 1963, he blasted the Organization of Petroleum Exporting Countries, at the time torn by internal rivalries, for failing to produce any benefits for his country. Half a century later, OPEC is still split and Venezuela is again unhappy, this time at the unwillingness of the organization’s top producer, Saudi Arabia, to rescue oil prices from a six-year low that’s dragging the battered Venezuelan economy into an even deeper crisis. On Sept. 10, Venezuela’s oil minister, Eulogio del Pino, tweeted appeals for OPEC and non-OPEC countries “to have a discussion on fair prices, minimum prices to ensure sustainability” and to “overcome our differences of opinion.” Venezuelan President Nicolás Maduro said on Sept. 16 that he was making progress on organizing a summit of petroleum exporting countries to have that discussion. OPEC member Algeria is backing […]

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OPEC focuses on rival mega projects, lives with shale swing output

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. After almost a year of painfully low oil prices, OPEC members are beginning to believe they are winning against upstart U.S. shale producers in a short-term market share contest. Yet insiders and experts say OPEC is looking for a longer-lasting impact on other high-cost production oil field plans, many in deep oceans, with bigger time scales, even if that means a period of cheap oil prices lasting for years. Privately, OPEC’s core Gulf members say they have resigned themselves to the idea that the U.S. shale industry’s high-tech flexibility means it will respond quickly when prices start rising again, making the United States the new swing producer in world oil, the role held for so long by Saudi Arabia. "The oil surplus is slowly being drawn from […]

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OPEC sees oil prices returning to $80/barrel by 2020

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC forecasters expect oil prices will rise by no more than $5 a barrel a year to reach $80 by 2020, with a slowing in rival non-OPEC production growth not enough to absorb the current oil glut, according to OPEC sources. The sources said the figures came from an updated mid-term strategy report discussed this week by representatives from the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, which has yet to be fully endorsed by OPEC ministers. The report forecasts that non-OPEC supply would amount to 58.2 million barrels per day by 2017, some 1 million barrels per day lower than in the previous forecast. That effectively means OPEC will have to supply the world with 1 million extra barrels per day – good news […]

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OPEC’s new medium-term forecasts show higher demand for its oil: delegates

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC’s new medium-term forecasts point to higher demand for the group’s oil, OPEC delegates said, a sign that its strategy of letting prices fall is discouraging supplies from competing producers. The forecasts, to be published in OPEC’s World Oil Outlook later this year, are expected to be discussed on Thursday during the second day of a meeting of OPEC’s national representatives taking place at its Vienna headquarters. "The new medium-term numbers show a higher demand for OPEC crude," said one OPEC delegate, who added that oil prices are assumed to be lower than previously. "There is an impact on higher-cost producers." OPEC’s 2014 World Oil Outlook expected demand for its oil to fall to 28.50 million barrels per day (bpd) in 2016 from 30 million bpd in […]

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Venezuelan leader says to travel to push for OPEC, non-OPEC meeting

Venezuelan President Nicolas Maduro said on Tuesday he would travel shortly to seek support for his push for a summit between OPEC and non-OPEC producers on lower oil prices. Maduro has lobbied for months for an emergency meeting and coordination with non-OPEC nations, but OPEC’s Middle East producers have pledged to maintain high output in a fight to defend market share against rising competition. This week Maduro reiterated calls for action within OPEC and beyond OPEC, mentioning controls on output and price bands. "Probably in coming days I will travel to reinforce work to achieve this historic summit between OPEC producers and non-OPEC producers," Maduro said after a four-hour televised broadcast. His calls for action come as Venezuelan oil prices, which averaged $41.08 last week, exacerbate a dire economic crisis that has goods ranging from cancer medication to car batteries in short supply, while raging inflation slams purchasing power […]

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OPEC says the world will want more of its oil next year

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC on Monday predicted higher demand for its crude oil next year, sticking to its view that a strategy of letting prices fall will tame the U.S. shale boom and cut a global surplus. The monthly report from the Organization of the Petroleum Exporting Countries also said a weaker outlook for China would contribute to slower global oil demand growth next year. "U.S. oil production has shown signs of slowing," OPEC said in the report. "This could contribute to a reduction in the imbalance of oil market fundamentals, however, it remains to be seen to what extent this can be achieved in the months to come." OPEC said it expected demand for its crude next year to average 30.31 million barrels per day (bpd), up 190,000 bpd […]

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