OPEC: DEMAND WILL UP
OPEC wrote, "Higher oil demand is expected in the 3rd and 4th Quarters", HE Dr Mohammed Bin Saleh Al-Sada, Qatar's Minister of Energy and Industry and current OPEC President said, expressing positive sentiments in a brief released from OPEC.
He added that, since February of this year, the oil price had experienced a steady improvement following a decline in crude oil production, supply outages and a decrease in oil inventories, while the global demand for oil improved in that period.
Dr Al-Sada said that the recent decline observed in oil prices and the current market volatility is only temporary. These are more of an outcome resulting from weaker refinery margins, inventory overhang – particularly of product stocks, timing of Brexit and its impact on the financial futures markets, including that of crude oil.
The Minister said, the economies of major oil consuming countries are expected to improve which in turn would augment oil demand in the coming quarters, especially in preparation for the approaching winter season in the Northern Hemisphere. This expectation of higher crude oil demand in 3rd and 4th Quarters of 2016, coupled with decrease in availability is leading the analysts to conclude that the current bear market is only temporary and oil price would increase during later part of 2016.
He reminded that investment is needed not only to meet the growth in demand but also to stem the natural decline of oil production from operating wells. He alluded to the expected decline in the oil supply vis-à-vis the demand and tightening of the markets in the period ahead, due to the unprecedented drop in capital expenditure in the Oil & Gas projects across the globe during 2015 and 2016 leading to curtailment of investments which were scheduled to be undertaken over the next four years.
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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.