FREEZE OIL OUTPUT
Saudi Arabia and Russia, the world's two largest crude producers, agreed to freeze output after talks in Qatar.
The deal to fix production at January levels will be "adequate" and Saudi Arabia still wants to meet the demand of its customers, Oil Minister Ali Al-Naimi said in Doha after the talks with Russian Energy Minster Alexander Novak. Qatar and Venezuela also agreed to participate, Al-Naimi said. The freeze is conditional on other nation's agreeing to participate, Russia's Energy Ministry said in a statement. Oil pared gains in London, after rising before the meeting amid speculation the countries would discuss production cuts.
"This is an announcement of a production freeze among countries whose production didn't even grow recently," said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. "If Iran and Iraq are not a part of the agreement, it's not worth much -- and even then there is still a question of compliance."
More than a year since the Organization of Petroleum Exporting Countries decided not to cut production to boost prices, oil remains about 70 percent below its 2014 peak. Supply still exceeds demand and record global oil stockpiles continue to swell, potentially pushing prices below $20 a barrel before the rout is over, Goldman Sachs Group Inc. said last week.
Iran, OPEC's fifth-largest producer, ruled out any curbs on its oil production when the group met in December. It plans to boost output and exports by 1 million barrels a day this year following the lifting of international sanctions last month. This week the nation loaded its first Europe-bound crude cargo in four years.
Iraq continues to boost production as it recovers from years of conflict and under investment. The nation's output reached a record 4.35 million barrels a day in January and more increases could follow, according to the International Energy Agency.
Brent crude was 2 percent higher at $34.06 a barrel at 10:01 a.m. in London, having earlier climbed as much as 6.5 percent.
"A freeze would not create an immediate U-turn, but it creates a better foundation for the price recovery in the second half," Olivier Jakob, managing director of consultant Petromatrix GmBh, said in a note to clients before the meeting concluded.
The freeze deal comes after months of competition for market share between Russia and Saudi Arabia. Riyadh has taken the rare step of selling crude into Moscow's backyard of eastern European, while Russia overtook Saudi Arabia in oil exports into China. The two nations are also backing opposite sides in the Syrian civil war.
According the IEA, Saudi Arabia produced 10.2 million barrels a day in January, below the most recent peak of 10.5 million barrels a day set in June 2015. Russia produced nearly 10.9 million barrels a day in the same month, a post-Soviet record, according to official data. Venezuela pumped 2.4 million barrels a day and Qatar produced 680,000, according to the IEA.
Qatar will lead monitoring of the output freeze agreement, the nation's Energy Minister Mohammad bin Saleh al-Sada said at a press briefing. Low oil prices haven't been positive for the world, he said.
|September, 20, 09:05:00|
|September, 20, 09:00:00|
|September, 20, 08:55:00|
|September, 20, 08:50:00|
|September, 20, 08:45:00|
|September, 20, 08:40:00|
BP and its partners in Azerbaijan's giant ACG oil production complex agreed Thursday to extend the production sharing contract by 25 years to 2049 and to increase the stake of state-owned SOCAR, reducing the size of their own shares.
The U.S. current-account deficit increased to $123.1 billion (preliminary) in the second quarter of 2017 from $113.5 billion (revised) in the first quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.4 percent in the first quarter.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading up 41 cents, or 0.8 percent, at $50.30 by 0852 GMT, near the three-month high of $50.50 it reached last Thursday. Brent crude futures LCOc1, the benchmark for oil prices outside the United States, were at $55.91 a barrel, up 29 cents, and also not far from the near five-month high of $55.99 touched on Thursday.
“The principal risk regarding Russian and Chinese activities in Venezuela in the near term is that they will exploit the unfolding crisis, including the effect of US sanctions, to deepen their control over Venezuela’s resources, and their [financial] leverage over the country as an anti-US political and military partner,” observed R. Evan Ellis, a senior associate in the Center for Strategic and International Studies’ Americas Program.