RUS | ENG | All
Enter the email or login, that you used for registration.
If you do not remember your password, simply leave this field blank and you will receive a new, along with a link to activate.

Not registered yet?
Welcome!

2017-06-05 15:10:00

BAD NEWS FOR OPEC

BAD NEWS FOR OPEC

BRENT OIL PRICES JUNE 2012 - JUNE 2017

WTI OIL PRICES JUNE 2012 - JUNE 2017

BOE - As oil prices sag despite OPEC's renewed efforts to shore up world crude markets, Wall Street banks have more bad news for the producer group: the outlook for next year isn't great either.

Oil futures have lost 8 percent since the Organization of Petroleum Exporting Countries and its allies agreed on May 25 to keep output constrained through the first quarter of 2018 in a bid to clear a global glut. While Goldman Sachs Group Inc. expects their strategy to ultimately succeed, they warn the surplus may re-appear once the curbs end. Morgan Stanley and JPMorgan Chase & Co. say the group will have little choice but to stick with the cuts even longer.

Resurgent supplies from U.S. shale drillers and fading growth in fuel demand mean that world oil markets could face another overhang next year, the banks predict. That means Saudi Arabia and Russia, the two biggest producers in the 24-nation coalition, may need to deliver on their promise to do "whatever it takes" to restore equilibrium.

"If OPEC wants to keep the market balanced next year, they will probably need to extend the production cut to all of 2018," Martijn Rats, managing director at Morgan Stanley in London, said by email. "Demand growth has slowed somewhat recently, and with U.S. production growing strongly, there doesn't seem to be much room for OPEC production to grow in 2018."

SLOW RECOVERY

Production cuts are taking longer than expected to eliminate the surplus as U.S. shale drillers boost production with surprising speed. American oil explorers, having learned to operate more efficiently during a two-year market slump, have restored almost all the output lost during the downturn. As a result, the market may be unable to absorb the return of production halted by OPEC and its partners when their pact ends in April.

"The market isn't able to see how OPEC exits production cuts without creating huge surpluses in 2018," said Jeff Currie, head of commodities research at Goldman Sachs in New York. "We see risks for a renewed surplus later next year if OPEC and Russia's production rises to their expanded capacity and shale grows at an unbridled rate."

Still, even if a surplus re-emerges in 2018, OPEC's current efforts to deplete stockpiles will make their task of managing it easier, according to Citigroup Inc.

While shale's recovery means next year's supply situation "looks weighty," OPEC's output cuts now mean that if inventories accumulate again, it would be from a lower level, said Ed Morse, head of commodities research at Citigroup in New York.

Those increases in inventories may nonetheless prove substantial enough to prevent prices gaining, said David Martin, an analyst at JPMorgan, who slashed his 2018 forecast for Brent crude by $10 a barrel to $45 on May 25. Brent traded near $49 a barrel on the ICE Futures Europe exchange in London on Friday.

Even if OPEC extends their output accord for all of next year, it may only succeed in stopping further stockpile increases, he said.

"OPEC may be shackled to its deal for a long time," said Martin.

-----

Earlier: 

OIL PRICE: ABOVE $49 

НИЗКИЕ ЦЕНЫ НАДОЛГО 

U.S. OIL INVENTORIES DOWN 

ЦЕНА URALS: $51,29 

MARGINAL OIL: NOT ENOUGH 

OIL COULD BE $50 

ЭНЕРГОДИАЛОГ РОССИЯ - ОПЕК

 

 

Tags: OPEC, OIL, PRICE,
Chronicle:
BAD NEWS FOR OPEC
2021, June, 25, 12:24:00
HYDROGEN RUSSIA AND CIS, Moscow, 20-21 October 2021
International Conference and Exhibition ‘Hydrogen Russia and CIS’ brings together more than 200 senior executives of hydrogen production plants from Russia and the CIS
BAD NEWS FOR OPEC
2021, June, 25, 12:23:00
ПЕРСПЕКТИВЫ РАЗВИТИЯ И МОДЕРНИЗАЦИЯ УГОЛЬНЫХ ПРЕДПРИЯТИЙ РОССИИ
Восток Капитал приглашает Вас принять участие в бесплатном вебинаре в рамках подготовки к международной конференции и выставке «Уголь Россия и СНГ» на тему: «Перспективы развития и модернизация угольных предприятий России», который состоится 16 июля, 13:00 (МСК).
BAD NEWS FOR OPEC
2021, June, 25, 12:20:00
U.S. COAL PRODUCTION UPDOWN
Through 24 weeks, US output was approximately 279 million st, up 8.9% compared with the year-ago period. It is annualized to be 581 million st for the year, up 8.7% from the previous year.
BAD NEWS FOR OPEC
2021, June, 24, 12:20:00
OIL PRICE: NOT ABOVE $76 ANEW
Brent rose 30 cents, or 0.4%, to $75.49 a barrel, WTI climbed 31 cents, or 0.4%, to $73.39 a barrel.
BAD NEWS FOR OPEC
2021, June, 24, 12:15:00
U.S. LNG DEMAND UP
Wide spreads between the price of LNG in end-user markets in Asia and Europe and feedgas prices based on the US Henry Hub have been incentivizing robust export activity from the US Gulf and Atlantic coasts.
BAD NEWS FOR OPEC
2021, June, 24, 12:10:00
CHINA NEED COAL
A conservative estimate would be for coal consumption of around one billion metric tonnes in 2050, still contributing 10%-15% of China's total energy consumption
BAD NEWS FOR OPEC
2021, June, 24, 12:05:00
CHINA COAL PRICES UP
The most-traded coking coal futures contract on the Dalian Commodity Exchange , for September delivery, ended at 2,037 yuan ($314.24) per tonne.
All Publications »