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OPEC, non-OPEC oil talks on ice, Iran return unlikely to change that

LONDON (Reuters) – OPEC efforts to bring non-member countries such as Russia on aboard in cutting output have made little progress, officials say, and even the chance of more Iranian exports hitting prices if sanctions end is unlikely to boost cooperation. Since the oil price collapse, top OPEC exporter Saudi Arabia has said it wanted non-OPEC producers to cooperate with the group. But a plan for a meeting between the two sides this month appears to have been shelved. "At first we have been planning to meet in March, but so far no-one has come forward with such an initiative. The situation has calmed down a bit," Russian Energy Minister Alexander Novak told Reuters. Novak was part of a Russian delegation that held talks with OPEC ministers before OPEC’s November meeting. But no supply cut deal was reached then, OPEC refused to act alone and Brent crude prices fell, […]

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OPEC comes cleaner on how much oil its members pump

LONDON (Reuters) – OPEC members’ own versions of their oil output were for years greeted with such scepticism that the group resorted to publishing what others thought they were producing. That gave rise to a mini-industry of OPEC watchers, tapping secretive sources to track every barrel. Output was hotly contested when the group squabbled over member quotas, which have since been abandoned. But on Monday, OPEC issued a set of production figures as reported to its Vienna Secretariat by member-countries, without any countries missing from the total for the first time in months. These also showed the difference between OPEC output based on member-countries’ own submissions, and that provided by OPEC’s list of secondary sources, which include consultants and industry media, to be narrowing. "I can see some countries trying to address these problems and publish better data," said an oil market expert working for a European government. "But […]

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OPEC Warns U.S. Oil Boom Could Be Over by Year-End

OPEC said Monday the U.S. oil boom could be over by the end of this year, offering a pessimistic view of American producers’ ability to withstand a historic collapse in crude prices and predicting that global petroleum supplies would realign with demand. The cartel, in its closely watched monthly oil-market report, cited spending cuts by U.S. producers and the falling number of American rigs drilling for oil in recent months after crude prices fell by about 60% from last summer to January before rallying in February. For instance, rig counts fell faster in February than they did in January, according to the latest Baker Hughes report. The Organization of the Petroleum Exporting Countries report comes when oil markets are at a crossroads and demonstrates the uncertainty over the staying power of the American oil boom. Just last week, the International Energy Agency said that American producers were defying expectations […]

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World Oil Demand

mb/dWorld Oil Demand1Q20122Q20123Q20124Q20121Q20132Q20133Q20134Q20131Q20142Q20143Q20144Q20141Q20152Q20153Q20154Q2015868890929496© 2015 OECD/IEA World Oil Demand *Please note that these Highlights are from the latest Oil Market Report, which is released in full to subscribers only – according to this schedule each month . Non subscribers get free access to the latest Highlights on this schedule, however the full Oil Market Report is released to the public two weeks after the report is released to subscribers. If you would like to receive the full report with accompanying charts and graphs on the day of publication please subscribe or contact the subscription manager . Crude oil prices stabilised following early-February gains , with ICE Brent rising more than NYMEX WTI which was weighed down by swelling US stockpiles. At the time of writing, Brent was trading at around $58/bbl – up nearly 30% from a six-year low in January. WTI was at around $48/bbl. Having bottomed-out in 2Q14, […]

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IEA: Strong U.S. Production Could Set Stage for Oil Price Fall

ENLARGE Manifolds that regulate the input and output of oil to the White Cliffs pipeline at the SemCrude tank farm north of Cushing, Okla, pictured in 2012. The U.S. has been producing and importing more oil than it is consuming and that extra crude is flowing into storage tanks, especially at the country’s main trading hub in Cushing. Photo: Associated Press The oil market’s recent rebound may not last, an influential energy watchdog warned on Friday, as the U.S.’s ability to keep pumping more crude has defied expectations and could set the stage for prices to fall again. In its closely watched monthly report, the International Energy Agency said U.S. oil production was up 115,000 barrels a day in February, some of it going into bulging storage inventories whose capacity may soon be tested. “That would inevitably lead to renewed price weakness,” the report said. Financial markets have been […]

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IEA sees renewed pressure on oil prices as glut worsens

LONDON (Reuters) – Oil prices might have stabilized only temporarily because the global oil glut is worsening and U.S. production shows no sign of slowing, the International Energy Agency said on Friday. The West’s energy watchdog said the United States may soon run out of spare capacity to store crude, which would put additional downward pressure on prices. That process would last at least until the second half of 2015, when growth in U.S. oil production is expected to start abating. Combined with an increase in global demand, the expected U.S. production slowdown would give some support to oil prices and respite to oil producers’ group OPEC, the IEA said. "On the face of it, the oil price appears to be stabilizing. What a precarious balance it is, however," the Paris-based IEA said in its monthly report. "Behind the façade of stability, the rebalancing triggered by the price collapse […]

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OPEC is winning its battle with U.S. shale: Kemp

LONDON (Reuters) – U.S. shale producers are falling behind in the Red Queen’s Race as the downturn in drilling means that new oil production is failing offset falling output from existing wells. The famous race is named after the scene from Lewis Carroll’s novel “Through the Looking-Glass”, in which the Red Queen warns Alice: “It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run twice as fast.” The race is a metaphor for the relationship between increased oil production from newly drilled wells on the one hand and declining output from old wells on the other. The net result is that the downturn in drilling is threatening to cut output for the first time since the start of the shale revolution. Other forms of oil production, notably from offshore fields in the Gulf of Mexico, […]

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History Suggests OPEC’s Days Could Be Numbered

"The last time they were in a parallel situation, with oil prices plummeting in the 1980s, you had all these proclamations that OPEC was dead," said Benn Steil , also at the Council on Foreign Relations, where he’s director of international economics. "Yet they weren’t, because when the fundamental forces of the business settled at a higher level of oil prices, they started to regain some relevance." You can read the World Bank study, which was authored by John Baffes, Ayhan Kose, Franziska Ohnsorge and Marc Stocker, here .

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Badri: OPEC shouldn’t cut output to ‘subsidize’ shale

MANAMA (Reuters) – The Organization of the Petroleum Exporting Countries Secretary-General said on Sunday that the group’s exporters should not cut output to "subsidize" higher-cost shale, an energy source whose recent growth is blamed by OPEC for weakening oil markets. Abdullah al-Badri added in remarks to a conference in Bahrain that tight oil, a term he has used for shale, was "not a challenge for us" but the market should now be left to decide which source of petroleum could survive at current prices. Oil prices have sunk to near six year lows in recent months as a result of a large supply glut, due mostly to a sharp rise in U.S. shale production as well as weaker global demand. The rapid decline has left several smaller oil producing countries reeling and has forced oil companies to slash budgets. "We welcome tight oil… but this source of energy costs […]

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