OIL MARKETS CORRECTION
Global crude markets will see a correction before the end of this year as current prices are forcing all producers to freeze their production, the United Arab Emirates' energy minister Suhail bin Mohammed al-Mazrouei said Monday.
"I believe the current prices are forcing everyone to freeze. It's happening as we speak. It doesn't make any sense for anyone to increase the production with the current prices," the minister told reporters on the sidelines of an aerospace conference in Abu Dhabi.
"To the contrary, many producing assets are losing now at the current oil prices and I think those are all [outside the Organization of the Petroleum Exporting Countries]. This is all good news for balancing the market. We just need to be patient," he said.
Mr. Mazrouei said that he was optimistic prices will see some correction before the end of this year, adding there is evidence every day that the glut in the market is decreasing while demand is solid.
Crude oil prices have plunged more than 70% since June 2014, largely because of surging supplies from the U.S., Russia and OPEC members including Saudi Arabia, Iraq, Nigeria and Iran.
Last month, the energy ministers of Saudi Arabia and Russia—the world's two largest crude-oil exporters—agreed with Qatar and Venezuela to freeze their production at the January levels amid mounting pressure to prop up slumping oil prices.
Ibe Kachikwu, Nigeria's minister of state for petroleum resources, said last week that some OPEC members are scheduled to meet with other producers, including Russia, on March 20 in Moscow to fine-tune talks on the output freeze. His comments were the first by an official providing details of the timing and location of a possible meeting.
Mr. Mazrouei, however, said that OPEC member U.A.E. hasn't yet received an official invitation to attend the meeting but the country "is always cooperating with non-OPEC and if there is an unanimous decision to meet among the majority members of OPEC we will meet."
Two Persian Gulf Arab OPEC delegates told The Wall Street Journal that no decision has been made yet on either the date or the location of the meeting between OPEC and producers from outside the group.
A third delegate familiar with the Saudi thinking said Gulf countries prefer to have the gathering in Doha in the first half of April.
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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.