RUSSIA - OPEC UNLIMITED
PLATTS - Maintaining a long-term oil management alliance with Russia and other allies will allow OPEC producers to react more quickly to changing fundamentals and stabilize the market, UAE oil minister Suhail al-Mazrouei told S&P Global Platts.
But the minister, who also holds the rotating OPEC presidency this year, declined to elaborate on what such a pact will entail, beyond insisting that it would be "dynamic and flexible."
"The important thing is for us to [be able to] take a decision in a quicker form than months or sometimes a year to agree" on how to manage the market, Mazrouei said in an interview on the sidelines of the International Energy Forum in New Delhi.
"There is comfort" between the 24 countries in the current OPEC/non-OPEC coalition, which committed to a 1.8 million b/d production cut agreement in late 2016 after nearly a year of negotiations, the minister added.
The deal is scheduled to run through the end of 2018, and Mazrouei said OPEC aims to draw up the framework of a permanent pact with its non-OPEC partners before it expires, to ensure continuity in the coalition's cooperation.
OPEC and Russia officials have not ruled out extending their production cuts into 2019 as part of the deal, but Mazrouei brushed off any such talk, saying it was far too early to discuss such possibilities with more than eight and a half months left to go in the year.
Nor was OPEC discussing whether it will step in to replace Venezuela's declining production to prevent an overtightening of the market. Venezuela's oil output in March was 1.49 million b/d, according to the latest Platts OPEC survey, the lowest since Platts began assessing OPEC production in 1988, save a major Venezuelan industry strike in late 2002 and early 2003.
"We still haven't balanced the market fully," Mazrouei said. "Therefore until the job is fully complete, we cannot talk about any other decision."
With US shale oil production ramping up and demand forecasts still uncertain, the minister acknowledged that the market outlook for the rest of the year remained hazy. The US Energy Information Administration on Tuesday estimated that domestic crude output would average a record 10.69 million b/d in 2018, up from 9.32 million b/d in 2017.
"There are many moving parts to the rebalancing so may take longer," Mazrouei said. "There is healthy demand this year that is also surprising us. Will it be 1.6 million b/d or 1.8 million b/d, or will it be 2 million b/d? That is also another factor to consider."
To help its members, OPEC staff have been engaging with their counterparts at the EIA, International Energy Agency, the International Energy Forum and other market watchers to improve the quality of its forecasts and analytics, he said.
"We have been working with everybody to improve transparency and close the gap in understanding between what is reported and what is actual," Mazrouei said.
OPEC officials have in the past complained about various agency analyses -- including, but not limited to, the EIA's Weekly Petroleum Status Report and the IEA's Monthly Oil Market Report -- for moving prices in ways that the producer group feels does not reflect on-the-ground supply and demand realities.
Saudi energy minister Khalid al-Falih, for example, sniped at IEA Executive Director Fatih Birol at the World Economic Forum in January for what he considered the agency's "oversized focus" and scaremongering on US shale.
The IEA in its January monthly report had noted the "explosive" potential for US output growth, but Falih accused the agency of taking US shale barrels "out of context" and expressed confidence that global demand would be able to absorb that supply.
Mazrouei told Platts that OPEC would seek to continue engaging with US shale producers, as it did at the CERAWeek conference in March in Houston, where OPEC officials had dinner with the CEOs of several US companies.
He said OPEC was well aware that US producers can not cooperate on market management, due to US antitrust laws, but stressed that dialogue was important to further each other's understanding of market fundamentals.
"We try to work around the legal framework in the US, we respect it and will never hinder, our aim is to understand one another not to talk about production that is not going to come to the market, and for us understand what they are bringing and for them to understand what we are bringing," Mazrouei said.
The market can accommodate both OPEC and US shale, he added, given expectations for global demand and economic growth in the years ahead.
"Every barrel is needed in the future," Mazrouei said. "We need more investment. We are not there in the level of investment so I am not too worried about that competition."
|July, 16, 11:05:00|
|July, 16, 11:00:00|
|July, 16, 10:55:00|
|July, 16, 10:50:00|
|July, 16, 10:45:00|
|July, 16, 10:40:00|
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.