OIL PRICE: $40
BOE - Crude will probably drop to less than $40 a barrel unless OPEC and allied producers extend their collective cuts in output beyond June, according to the Abu Dhabi Investment Authority’s head of research.
The six-month cuts that took effect in January have set a floor for prices, but an increasing supply of U.S. shale oil together with record-high inventories are keeping the per-barrel price of crude from rising beyond the upper $50s, Christof Ruehl said Wednesday at a conference in Dubai.
“If OPEC and the coalition don’t extend the agreement to continue cuts, that price floor will go,” he said. “Without it, prices would fall, and there’s nothing to stop oil going below $40 a barrel.”
The Organization of Petroleum Exporting Countries and other major producers including Russia agreed in December to pump less oil to try to rein in a global glut weighing on prices. OPEC plans to decide at a meeting next month whether to extend its production cuts into the second half of the year. Benchmark Brent crude was trading 9 cents lower at $52.01 a barrel at 2:14 p.m. Dubai time.
Producer countries won’t come close to eliminating the excess of stored oil unless they extend their output limits into the second half of the year, said Ruehl, who worked formerly as BP Plc’s chief economist. Oil consumers may need two and a half more years to use up the current surplus in global inventories, he said.
One consequence of the cuts for OPEC is that Iraq and Iran are gaining market share at the expense of the group’s biggest member Saudi Arabia, Ruehl said. The Saudis have made comparatively larger cuts in production than Iraq, which ranks as OPEC’s second-biggest producer, while Iran, the third-largest, is allowed to slightly increase output.
Abu Dhabi, capital of the United Arab Emirates, holds most of the OPEC nation’s crude reserves. The Abu Dhabi Investment Authority is one of the world’s largest sovereign wealth funds.
|November, 24, 09:45:00|
|November, 24, 09:40:00|
|November, 24, 09:35:00|
|November, 24, 09:30:00|
|November, 24, 09:25:00|
|November, 24, 09:20:00|
BLOOMBERG - As Saudi Arabia led OPEC’s output cuts this year to shrink a global glut, it’s lost out on market share in the world’s biggest energy consumer. Russia in September retained the top Chinese supplier spot for the seventh straight month, while the kingdom was third.
PLATTS - The quality of Russia's key Urals crude exports towards Europe will continue to fall next year as more of the country's low-sulfur oil flows are diverted eastward to China, Russian national oil pipeline operator Transneft warned.
FT - OCI — the world’s third-largest polysilicon maker by capacity and South Korea’s biggest — this month reported a 3,373 per cent increase in operating profit to Won78.7bn ($72m) for the July-September quarter, its best performance in five years. Rival Hanwha Chemical saw third-quarter net profit jump 25 per cent to a record Won252bn.
U.S. Rig Count is up 330 rigs from last year's count of 593, with oil rigs up 273, gas rigs up 58, and miscellaneous rigs down 1 to 0. Canada Rig Count is up 41 rigs from last year's count of 174, with oil rigs up 13, gas rigs up 30, and miscellaneous rigs down 2 to 2.