IEA said, oil production from the Middle East has climbed to a record while U.S. output slumps, in a sign that OPEC's strategy of defending market share is succeeding.
Middle Eastern output exceeded 31 million barrels a day for a third month in June amid near-record supply from Saudi Arabia, while U.S. oil production slid 140,000 barrels a day to 12.45 million. While the re-balancing of global oil markets is progressing, record-high inventories remain a threat to the recent stability of oil prices.
When U.S. shale production was moving upwards very fast it became fashionable to talk of lower reliance on traditional suppliers, the Middle East's resurgence is an eloquent reminder that even when U.S. shale production does resume its growth, older producers will remain essential for oil markets.
Oil has recovered more than 70 percent from the 12-year low reached in January as Saudi Arabia's strategy to pressure OPEC's rivals succeeds in reversing the U.S. shale oil boom. Elevated output from the Middle East pushed the region's share of world supplies to 35 percent, the highest since the late 1970s.
Production from the Organization of Petroleum Exporting Countries climbed to an eight-year high last month, boosted by the re-admission of Gabon, which swelled the number of members to 14. The group's crude output rose 400,000 barrels a day to 33.21 million a day as Saudi Arabia boosted production to meet peak domestic demand during the summer and as Iran continued its export recovery following the end of international sanctions in January.
Not all of OPEC's members have reaped the benefits of the Saudi-led market strategy. Venezuela's crude production sank to a 13-year low of 2.18 million barrels a day last month as an economic crisis triggered by the oil-price rout weighed on the country's petroleum industry.
In the U.S., crude production retreated by 220,000 barrels to 8.9 million a day in April, the most recent month for which comprehensive data is available. That was the biggest drop since 2008 as the two-year price slump depressed investment and drilling activity. Output from all countries outside OPEC will tumble by 900,000 barrels a day this year, the largest decline since 1992, before recovering by 200,000 barrels a day in 2017, the agency predicted.
The agency made few changes to its forecasts, raising estimates for global oil demand this year and next by 100,000 barrels a day amid resilient fuel consumption in Europe. The world growth rate for 2017 remains unchanged, with demand seen rising 1.3 percent to 97.4 million barrels a day.
While supply and demand were mostly in balance in the second quarter, bloated stockpiles remain a dampener on oil prices. Oil inventories in industrialized nations climbed to an all-time high of more than 3 billion barrels in May, while the volume of crude being hoarded on tankers at sea has reached the highest level since 2009.
The modest fall back in oil prices in recent days to closer to $45 a barrel is a reminder that the road ahead is far from smooth.
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PLATTS - For full-year 2017, South Korea's crude imports from its biggest supplier Saudi Arabia fell 1.7% to 319.02 million barrels, compared with 324.45 million barrels in the previous year, customs data showed. On the contrary, South Korea has imported 1.77 million mt, or around 13 million barrels, of crude from the US in 2017, about four times higher than in 2016. Shipments from Russia grew to 140,000 b/d last year from 112,000 b/d in 2016.
AOG - ADNOC’s 2030 strategy, he said, aims to capitalise on predicted global economic growth and demand for oil and petrochemical products, particularly in non-OECD countries. As its business responds to changing market dynamics, the company will continue to broaden its partnership base, strengthen its profitability, adapt to new realities and expand market access.
WNN - Under the terms of the assignment and purchase agreement it has signed with Nucleus and Brookfield, Toshiba will sell its rights to assert claims against Westinghouse related to the parent guarantees in the amount of $5.788 billion, and on account of other claims Toshiba holds against Westinghouse in the amount of $2.284 billion to Nucleus, for the sale price of $2.160 billion.
REUTERS - Brent crude futures LCOc1 were at $69.23 a barrel at 0808 GMT, up 8 cents from their last close, but down from a high of $69.37 earlier in the day. Brent on Monday rose to $70.37 a barrel, its highest since December 2014, the start of a three-year oil price slump. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $63.84 a barrel, down from a high of $63.89 earlier, but up 11 cents from their last settlement. WTI hit $64.89 on Tuesday, also the highest since December 2014.