OIL PRICES: STOP PANICKING
Oil will rebound by the second half of next year as supply and demand don't justify the recent collapse and prices are now low enough to threaten investment in production, OPEC's Secretary-General said.
While a report today from the Organization of Petroleum Exporting Countries cut forecasts for crude it will need to provide for most of the next two decades because of the shale-energy boom in the U.S., Secretary-General Abdalla El-Badri said the group isn't "panicking" amid this year's plunge.
"We're concerned but not panicking," El-Badri said at a press conference in Vienna today. "The price will rebound by the second half of next year. This situation of low prices cannot continue because if it continues, most of the investments will be stopped."
Brent futures have tumbled 28 percent since mid-June, a move El-Badri said was excessive given that supply and demand levels are "reasonable."
Ali al-Naimi, oil minister of Saudi Arabia, OPEC's biggest member, is attending a conference on climate change in Venezuela and met with the country's foreign minister, Rafael Ramirez. Ramirez told reporters they mostly discussed climate change yesterday.
Al-Naimi's trip had been planned a about a year in advance and there's nothing "peculiar" about the visit, El-Badri said. Oil prices have reacted to the "symbolism" of the trip as Saudi Arabia and Venezuela coordinated output cuts in the 1980s, according to Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London.
The Saudi minister is due to attend another event in Mexico next week. OPEC hasn't invited producing countries from outside the group to it attend its ministerial meeting on Nov. 27, El-Badri said.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.