85% GLOBAL OIL DEAL
BLOOMBERG - The global deal to rein in oil output has removed "85 percent of the problem" of oversupply, and OPEC and allied producers are seeking ways to cooperate after the agreement ends, according to United Arab Emirates Energy Minister Suhail Al Mazrouei.
The world economy is benefiting from the cuts, he said at a Bloomberg Businessweek Middle East conference in Dubai. Mazrouei, who also serves this year as president of the Organization of Petroleum Exporting Countries, isn't concerned that a potential international trade war might upset the crude market, he said.
"I'm not that concerned about a trade war getting to the oil market," Al Mazrouei said in the interview. "It may affect the cost of drilling, the cost of completion, but I think overall the effect is going to be minor to the oil prices."
Participants in the oil-cuts accord plan to meet later this month in Jeddah, Saudi Arabia, to assess their progress toward clearing a glut and re-balancing the market. Saudi Arabia, Russia, the U.A.E. and other producers agreed in November to extend the deal through this year. Brent crude has gained 1.5 percent in 2018 and was 25 cents higher at $67.89 a barrel at 11:55 a.m. in London.
The benchmark fell 2.5 percent on Monday after China imposed retaliatory tariffs on U.S. goods, the latest move in an escalating trade dispute between the world's largest economies.
Russia has been a "great partner" in the cuts agreement, and the majority of participants in the deal are supportive of a longer-term cooperation between OPEC and non-OPEC producers, Mazrouei said.
Producers should first achieve their goal of reducing crude inventories in developed economies to the five-year average before they consider adopting a different measurement for when the oil market is re-balanced, he said. OPEC and its allies have held talks about changing the way they gauge the impact of their production cuts, including possibly using use a seven-year inventory average, according to delegates from the group.
"I would prefer to focus on achieving the mission first," Al Mazrouei told.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.