OIL PRICES: ABOVE $50
Oil prices can climb above $50 a barrel if an output freeze deal is struck in Doha this weekend, according to Bank of America Corp.
"A flat output profile for OPEC (excluding Iran) and Russia would tighten global balances by almost 0.5 million barrels a day in the second half relative to our expectations and push the oil market into a deficit in the third quarter," the U.S. bank wrote in a note on Wednesday. That would "push prices above $50 near term," it said.
At least 15 countries — including most members of the Organization of Petroleum Exporting Countries, as well as non-members such as Russia — have agreed to meet in the Qatari capital on the weekend. Brent crude, which sank to a 12-year low in January, has climbed about 30 percent since Saudi Arabia, Russia, Qatar and Venezuela reached a preliminary agreement to freeze output on Feb. 16.
Both a soft output freeze and a hard output freeze, with "some enforcement mechanism," would boost prices to above $50 a barrel, Bank of America said. Brent traded at $44.20 as of 12:06 p.m. in London.
Whatever the outcome of the meeting, the market is rebalancing, partly due to a drop in U.S. production and rising global demand, the bank said.
U.S. oil production stands at 9.01 million barrels a day, down 6.2 percent from the record high of 9.61 million reached in June last year, according to the U.S. Department of Energy.
Bank of America didn't exclude the possibility of a failure to reach a freeze agreement, a scenario that would lead to prices dropping below $40 a barrel. One risk is that Saudi Arabia could announce an expansion in production in response to Iran's return to the market following the end of the sanctions on its nuclear agreement in January. In that case, prices could fall as low as $30 a barrel, the bank said.
The deputy Crown Prince of Saudi Arabia said earlier this month that the world's biggest crude exporter would only consider an output freeze if Iran joined in, while Tehran has repeatedly said its aim is to ramp up production to recover market share lost under sanctions.
"Middle East politics could once again trump oil economics," Bank of America said.
|October, 19, 11:30:00|
|October, 19, 11:25:00|
|October, 19, 11:20:00|
|October, 19, 11:15:00|
|October, 19, 11:10:00|
|October, 19, 11:05:00|
PLATTS - Norwegian natural gas exports to the UK jumped to their highest in six months Wednesday as consistently high UK prices incentivized flows normally only reserved for wintry periods.
AZERNEWS - The estimated cost of construction of nuclear power plant of Russian design in Uzbekistan will be about $ 11 billion, the launch of the first power unit has been planned for 2028, the Aide to the President of the Russian Federation Yury Ushakov said.
SHANA - Managing Director of the Iranian Gas Engineering and Development Company (IGEDC) Hassan Montazer Torbati said the supply of one billion cubic meters per day of natural gas by National Iranian Gas Company (NIGC) was one of the goals of the company by 2021.
WNN - China and Belgium have signed a framework agreement on cooperation in the peaceful use of nuclear energy. The agreement was one of several accords signed in Brussels yesterday during a meeting between Chinese Premier Li Keqiang and Belgian Prime Minister Charles Michel.