OPEC CAN'T CUT
OPEC will stick to its decision on Dec. 4 to maintain a policy of not limiting production, despite the drop in global prices, Iraq's oil minister said on Sunday, adding that any output reduction aimed at boosting prices would have to be coordinated with non-members.
"We are in a real world, OPEC is not the only producer or the only player. So we have to see what the decisions of others should be - Russia and the United States and other producers," Adel Abdul Mahdi told Reuters on the sidelines of an Arab oil producers' meeting in Cairo.
"OPEC can't take a unilateral decision, for example, to cut production and others ... raise production. Either we all go to cut production to really defend prices or we have to wait and see," he said in an interview.
"We can't repeat those old experiences of OPEC and then lose both, lose production and the prices. Because now many other producers are capable of really raising their production ... We are sticking (with the Dec. 4 decision)."
Global oil prices tumbled after the members of the Organization of the Petroleum Exporting Countries (OPEC) failed on Dec. 4 to agree a ceiling on their oil production, which has already been running at near record levels since last year in an attempt to drive higher-cost producers such as U.S. shale drillers out of the market.
In addition new supplies are likely to hit the market next year as Iran ramps up production after sanctions are lifted, creating fears of a growing supply glut.
Front-month Brent crude futures [O/R] closed at below $37 a barrel on Friday.
Abdul-Mahdi said he hoped oil prices would rebound but he did not "think it will be tomorrow."
"We can see that the price doesn't correspondent with the cost in most oil fields. This is not logical," he said.
Meanwhile in Iraq a deal on oil exports from Iraq's Kurdish region had yet to be reached, Abdul-Mahdi said, reiterating the Baghdad central government's opposition to Erbil selling its oil directly instead of delivering it to Iraq's state oil marketing firm SOMO.
"We are still in a standstill ... We are waiting for real discussions with our brothers in Kurdistan," he said.
The Kurdistan Regional Government began bypassing Baghdad and exporting oil directly in 2014, following a dispute with the federal government about its share of the budget. It is currently exporting more than 500,000 barrels per day (bpd).
"If they deliver oil, they will have the 17 percent, if they don't they will not have the 17 percent," he said, referring to the portion of the federal budget allocated to the Kurdish authority in exchange for its oil.
He also said that Baghdad's discussions with international oil companies operating in the south over revising the terms of their service agreements were heading in a good direction.
"We received some reduction in costs from the IOCs. We are still discussing. The IOCs presented some suggestions... We are nearer to each other than before," he said.
"We have to put some incentives there for the IOCs but we also want them to bear responsibilities when the price is down and also we both be responsible on reducing the cost."
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IEA - For the third consecutive year, global energy investment declined, to USD 1.8 trillion (United States dollars) in 2017 – a fall of 2% in real terms. The power generation sector accounted for most of this decline, due to fewer additions of coal, hydro and nuclear power capacity, which more than offset increased investment in solar photovoltaics.
EIA - Crude oil production from the major US onshore regions is forecast to increase 143,000 b/d month-over-month in July from 7,327 to 7,470 thousand barrels/day , gas production to increase 1,066 million cubic feet/day from 69,466 to 70,532 million cubic feet/day .
U.S. FRB - Industrial production rose 0.6 percent in June after declining 0.5 percent in May. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase. Manufacturing output moved up 0.8 percent in June.
U.S. DT - The sum total in May of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $69.9 billion. Of this, net foreign private inflows were $58.8 billion, and net foreign official inflows were $11.1 billion.