85% GLOBAL OIL DEAL
BLOOMBERG - The global deal to rein in oil output has removed "85 percent of the problem" of oversupply, and OPEC and allied producers are seeking ways to cooperate after the agreement ends, according to United Arab Emirates Energy Minister Suhail Al Mazrouei.
The world economy is benefiting from the cuts, he said at a Bloomberg Businessweek Middle East conference in Dubai. Mazrouei, who also serves this year as president of the Organization of Petroleum Exporting Countries, isn't concerned that a potential international trade war might upset the crude market, he said.
"I'm not that concerned about a trade war getting to the oil market," Al Mazrouei said in the interview. "It may affect the cost of drilling, the cost of completion, but I think overall the effect is going to be minor to the oil prices."
Participants in the oil-cuts accord plan to meet later this month in Jeddah, Saudi Arabia, to assess their progress toward clearing a glut and re-balancing the market. Saudi Arabia, Russia, the U.A.E. and other producers agreed in November to extend the deal through this year. Brent crude has gained 1.5 percent in 2018 and was 25 cents higher at $67.89 a barrel at 11:55 a.m. in London.
The benchmark fell 2.5 percent on Monday after China imposed retaliatory tariffs on U.S. goods, the latest move in an escalating trade dispute between the world's largest economies.
Russia has been a "great partner" in the cuts agreement, and the majority of participants in the deal are supportive of a longer-term cooperation between OPEC and non-OPEC producers, Mazrouei said.
Producers should first achieve their goal of reducing crude inventories in developed economies to the five-year average before they consider adopting a different measurement for when the oil market is re-balanced, he said. OPEC and its allies have held talks about changing the way they gauge the impact of their production cuts, including possibly using use a seven-year inventory average, according to delegates from the group.
"I would prefer to focus on achieving the mission first," Al Mazrouei told.
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U.S. EIA - Energy companies’ free cash flow—the difference between cash from operations and capital expenditure—was $119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum during 2013–18 Companies reduced debt for seven consecutive quarters, contributing to the lowest long-term debt-to-equity ratio since third-quarter 2014
OPEC - Total oil demand for 2018 is now estimated at 98.82 mb/d. In 2019, world oil demand growth is forecast to rise by 1.41 mb/d. Total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.
ARAB NEWS - Oil exports from southern Iraq are heading for a record high this month, two industry sources said, adding to signs that OPEC’s second-largest producer is following through on a deal to raise supply and local unrest is not affecting shipments.
PLATTS - The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.