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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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