OIL PRICES: STOP PANICKING
Oil will rebound by the second half of next year as supply and demand don't justify the recent collapse and prices are now low enough to threaten investment in production, OPEC's Secretary-General said.
While a report today from the Organization of Petroleum Exporting Countries cut forecasts for crude it will need to provide for most of the next two decades because of the shale-energy boom in the U.S., Secretary-General Abdalla El-Badri said the group isn't "panicking" amid this year's plunge.
"We're concerned but not panicking," El-Badri said at a press conference in Vienna today. "The price will rebound by the second half of next year. This situation of low prices cannot continue because if it continues, most of the investments will be stopped."
Brent futures have tumbled 28 percent since mid-June, a move El-Badri said was excessive given that supply and demand levels are "reasonable."
Ali al-Naimi, oil minister of Saudi Arabia, OPEC's biggest member, is attending a conference on climate change in Venezuela and met with the country's foreign minister, Rafael Ramirez. Ramirez told reporters they mostly discussed climate change yesterday.
Al-Naimi's trip had been planned a about a year in advance and there's nothing "peculiar" about the visit, El-Badri said. Oil prices have reacted to the "symbolism" of the trip as Saudi Arabia and Venezuela coordinated output cuts in the 1980s, according to Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London.
The Saudi minister is due to attend another event in Mexico next week. OPEC hasn't invited producing countries from outside the group to it attend its ministerial meeting on Nov. 27, El-Badri said.
|October, 15, 12:30:00|
|October, 15, 12:25:00|
|October, 15, 12:20:00|
|October, 15, 12:15:00|
|October, 15, 12:10:00|
|October, 15, 12:05:00|
GAZPROM - The parties discussed relevant issues related to bilateral cooperation, including the Baltic LNG project. Emphasis was placed on the priority measures aimed at developing a joint design concept (pre-FEED).
BHGE - U.S. Rig Count is up 11 rigs from last week to 1,063, with oil rigs up 8 to 869, gas rigs up 4 to 193, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 13 rigs from last week to 195, with oil rigs up 8 to 127 and gas rigs up 5 to 68.
REUTERS - Brent crude futures had risen $1.02 cents, or 1.3 percent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown. U.S. West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 percent, at $71.77 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent drop this week.
EIA - Brent crude oil spot prices averaged $79 per barrel (b) in September, up $6/b from August. EIA expects Brent spot prices will average $74/b in 2018 and $75/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.