Oil prices may fall again as OPEC reviews supply cuts

A joint committee of ministers from OPEC and non-OPEC oil producers has agreed to review whether a global pact to limit supplies should be extended by six months, it said in a statement on Sunday.

Reuters reports that an earlier draft of the statement had said the committee “reports high level of conformity and recommends six-month extension”.

But the final version said only that the committee had requested a technical group and for the OPEC Secretariat to “review the oil market conditions and revert… in April, 2017 regarding the extension of the voluntary production adjustments”.

Oil sector analysts said the lack of an immediate extension could drag on crude prices.

“The dropping of the recommendation to extend cuts in favour of technical review committee is likely to lead to a lot of disappointment and potential further liquidation of long positions by money managers that will put downward pressure on oil prices,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas in London.

It was not immediately clear why the wording had been changed, although a senior industry source said the committee lacked the legal mandate to recommend an extension.

The Organization of the Petroleum Exporting Countries and rival oil-producing nations were meeting in Kuwait to review progress with their global pact to cut supplies.

OPEC and 11 other leading producers including Russia agreed in December to cut their combined output by almost 1.8 million barrels per day (bpd) in the first half of the year. The original deal was to last six months, with the possibility of a six-month extension.

“Any country has the freedom to say whether they do or they don’t support (an extension). Unless we have conformity with everybody, we cannot go ahead with the extension of the deal,” Kuwaiti Oil Minister Essam al-Marzouq said, adding that he hoped a decision would come by the end of April.

The oil ministerial committee “expressed its satisfaction with the progress made towards full conformity with the voluntary production adjustments and encouraged all participating countries to press on towards 100 percent conformity,” the statement said.

The December accord, aimed at supporting the oil market, has lifted crude to more than $50 a barrel. But the price gain has encouraged U.S. shale oil producers, which are not part of the pact, to boost output.

The committee said it took note that certain factors, such as low seasonal demand, refinery maintenance and rising non-OPEC supply had led to an increase in crude oil stocks. It also observed the liquidation of positions by financial players.

“However, the end of the refinery maintenance season and noticeable slowdown in U.S. stock build as well as the reduction in floating storage will support the positive efforts undertaken to achieve stability in the market,” it said.

It asked the OPEC Secretariat to review oil market conditions and come back with recommendations in April regarding an extension of the agreement.

“This reaffirms the commitment of OPEC and participating non-OPEC countries to continue to cooperate,” the statement said.

Russian Energy Minister Alexander Novak said it was too early to say whether there would be an extension, although the agreement was working well and all countries were committed to 100 percent compliance.

Olivier Jakob, of oil consultancy Petromatrix, said that with the revision of the ministerial committee’s statement, it was becoming more difficult to know who was responsible for what in OPEC.

“That is not the best option to provide clarity to the oil markets,” Jakob said.

Ellen Wald, a consultant on the global energy industry, said: “I think the market will react negatively to the lack of a clear direction on a rollover for the deal.”

‘ENCOURAGING ELEMENTS’

Before the meeting, Iraqi Oil Minister Jabar Ali al-Luaibi told reporters there were some encouraging elements that suggested the oil market was improving, and that if all OPEC members agreed measures to help price stability, Iraq would support such steps.

“Any decisions taken unanimously by members of OPEC … Iraq will be part of the decision and will not be deviating from this,” Luaibi said.

Iraq’s oil production is running at 4.312 million bpd this month, Luaibi said, adding that his country had cut its oil exports by 187,000 bpd so far and would reach 210,000 bpd in a few days.

Compliance with the supply-cut deal was 94 percent in February among OPEC and non-OPEC oil producers combined, Russia’s Novak said.

Russia is committed to cuts of 300,000 bpd by the end of April, Novak said.

Novak said he expects global oil stockpiles to decrease in the second quarter of this year.

“The dynamics are positive here, I believe,” Novak said, adding that inventories in the United States and other industrialised countries had risen by less than in the past.

Kuwait’s oil minister said the market may return to balance by the third quarter of this year if producers comply fully with their production targets.

“More has to be done. We need to see conformity across the board. We assured ourselves and the world that we would reach our adjustment to 100 percent conformity,” Marzouq said.

Oil deal exceeding expectations…countries cutting more than agreed – OPEC

The Organisation of Petroleum Exporting Countries (OPEC) says the historic oil deal sealed in December is yielding more results that expected.

The Vienna-based oil cartel, said some countries party to the deal are cutting production levels below the points agreed at the December accord.

In its first bulletin for 2017, OPEC said 24 countries have joined in turning a new page in the oil history of the world.

Quoting Alexander Novak, minister of energy of the Russian Federation, OPEC said “the results we are observing … are exceeding our expectations. In fact, many countries are going beyond what has been agreed in December in working strongly to the letter in the spirit of the ‘Declaration’.”

Via a commentary on the bulletin,  OPEC said the projection of Mohammed Barkindo, its secretary-general — that the world was about to turn a historic page in oil history — is now becoming a reality.

“Just a few days after the landmark ‘Declaration of Cooperation’ was signed in December, a delighted OPEC Secretary General, Mohammad Sanusi Barkindo, said at the Petrotech 2016 Conference in New Delhi, India that the world was on the verge of turning a historic page in global oil.

“Of course, that was before the OPEC/non-OPEC agreement came into force on January 1. Following the positive outcome and confidence expressed at the inaugural meeting of the monitoring committee, the Organization’s chief executive might want to rephrase that statement to ‘has turned’ a historic page.”

OPEC Loses $1 Trillion To Oil Decline In Two Years

The Secretary General of the Organization Of Petroleum Exporting Countries (OPEC), Mr Mohammed Barkindo, says member countries have lost one trillion dollars worth of oil revenue to the fall in global oil prices between 2014 and 2016.

The OPEC scribe, added that these losses were in terms of deferred and outright cancellations of projects across its entire value chain.

Barkindo, who revealed this during a visit to the Minister of State for Petroleum, Doctor Ibe Kachikwu, commended his measures to solve Nigeria’s longstanding challenges with joint venture cash-call obligations.

 

Source: Channels TV

Oil prices rise after ‘over 90% compliance’ to OPEC deal

Oil prices rose by more than one dollar a barrel on Tuesday, after the Organisation of Petroleum Exporting Countries (OPEC) announced that over 90% of OPEC countries were conforming to the oil deal.

Members and non members of the organisation agreed to cut production in December 2016.

Brent crude futures, the international benchmark for oil prices, traded at $57.20 per barrel, recording an increase of $1.13 from its last closing price.

In 2016, oil prices traded as low as $27 per barrel and began to rise towards the end of 2016.

While speaking at the 201 International Petroleum (IP) week, Mohammed Barkindo, secretary-general of OPEC, said that over 90% of member states were conforming to the oil deal.

“In OPEC’s most recent monthly oil market report the production data for January shows conformity from participating OPEC nations above 90%,” Barkindo said.

“Moreover, all countries involved remain resolute in the determination to achieve a higher level of conformity. We are also determined to realise the joint conference decision to strengthen and sustain this cooperation between OPEC and non-OPEC.

“We want this to be a lasting and flexible partnership that when necessary can help reduce volatility, provide more confidence to the market, and steer a path towards more sustainable stability.

“All countries involved remain resolute in the determination to achieve a higher level of conformity.”

 

Source: The Cable

OPEC, WFP to feed two million victims of Boko Haram insurgency.

The OPEC Fund for International Development (OFID) has approved an emergency assistance grant for humanitarian food and nutrition assistance operations in famine-stricken areas in north-east Nigeria.

A statement released by the organisation said that the grant, which will support the operations of World Food Programme (WFP), will target over two million people in areas affected by the Boko Haram crisis.

“This latest initiative will target over two million people in the worse-affected areas—Borno and Yobe states—including population pockets where humanitarian assistance has not yet reached.

“The ongoing unrest in northeast Nigeria has caused critical levels of food insecurity and malnutrition and as a result, some 4.6 million people are going hungry. An estimated two million people are in urgent need of assistance, and over one-half of children under the age of five are suffering from moderate to acute malnutrition.

“Activities will include providing food, and where markets are functioning, cash-based assistance and distributing specialized nutrient-rich food for children under the age of five.”

The WFP said that it will focus on low-income families, helping them with money to buy nutritious food to prevent any relapse after their children must have been treated for malnutrition.

In August, a survey conducted by Philips Consulting reported that more than 93 million Nigerians were battling food insecurity.

The survey results showed that food was the highest household expenditure by more than half of the respondents.

In October, WFP donated food to Internally Displaced Persons (IDP) residing in the Gwoza camp.

Oil prices stabilize as Russia joins OPEC in production cut

Oil steadied on Wednesday as Russia joined OPEC in cutting production to balance the market, although large supply in places such as the United States dragged on prices.

The Organisation of the Petroleum Exporting Countries, OPEC, is an intergovernmental organisation of oil-exporting developing nations that aims to ensure stable oil prices within global oil markets.

Brent crude futures LCOC1, the international benchmark for oil prices, were trading at $55.63 per barrel at 0749 GMT (02:49 a.m. ET), up 5 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 5 cents to $52.86 a barrel.

Prices reversed earlier falls after reports that Russia cut its oil and gas condensate production by around 100,000 barrels per day (bpd) between December and January, down to 11.11 million bpd.

Russia’s cuts are part of an effort led by the OPEC, of which Russia is not a member, to prop up the market and end a global fuel supply glut.

As part of this, OPEC has said it will cut production by around 1.2 million barrels per day (bpd) in the first half of 2017.

Other producers, including Russia, have pledged to cut another 600,000 bpd in output.

A Reuter’s survey published on Tuesday showed that OPEC’s output fell by over 1 million bpd in January to 32.27 million bpd between December and January.

“That’s a good start to cut production to bring the market back toward balance,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

However, Mr. McKenna added that there were still some questions about whether or not OPEC will achieve its goals to cut even deeper and for the full period of the first half of 2017.

Traders said a reported climb in U.S. crude inventories was also preventing oil prices from rising by much.

“The release of the American Petroleum Institute’s (API) crude inventories at a much higher than expected 5.8 million barrels saw both Brent and WTI quickly give back gains,’’ Jeffrey Halley, senior market analyst future brokerage OANDA in Singapore, said.

The API data showed that commercial U.S. crude inventories now stood at 488 million barrels.

Official U.S. storage data from the Energy Information Administration (EIA) is due later on Wednesday.

 

Source: Reuters

Global oil output falls by 1.07 million bpd in January.

Following the supply cut deal by the Organisation of Petroleum Exporting Countries, OPEC, oil output of member-states is set to fall by more than 1 million barrels per day (bpd) in January.

According to the report of a Reuters survey released Tuesday, the fall points to a strong start by the group in implementing its first supply cut deal in eight years.

The survey is based on shipping data provided by external sources, Thomson Reuters flows data and information provided by sources at oil companies, OPEC and consulting firms.

The Organisation of the Petroleum Exporting Countries agreed to cut its output by about 1.2 million bpd from January? 1 to prop up oil prices and reduce a supply glut.

The survey stated that supply from the 11 OPEC members with production targets under the deal has averaged 30.01 million bpd, down from 31.17 million bpd in December, based on shipping data and information from industry sources.

Compared with the levels that the countries agreed to make the reductions from, OPEC members have cut production by 958,000 bpd of the pledged 1.164 million bpd, equating to 82 percent compliance, the survey says.

It stated further that compliance of 80 per cent comfortably exceeds the initial 60 per cent achieved when the previous cuts deal was implemented in 2009, and it adds to indications that adherence to the deal so far has been high.

Reuters reports that oil edged above $55 a barrel on Tuesday. The cuts agreed by OPEC, Russia and other independent producers has helped to lift prices from a 12-year low near $27 a year ago.

 

The January drop in OPEC output has been offset slightly by higher supply from Libya and Nigeria, which are both exempted from the OPEC agreement because of output losses caused by conflict.

Saudi Arabia has reduced output to less than 10 million bpd in January, industry sources told Reuters, implementing a bigger cut than it had agreed to set a good example on compliance.

Iran, which was allowed to raise output under the OPEC deal because sanctions had crippled past supply, pumped an additional 20,000 bpd.

OPEC announced a production target of 32.5 million bpd at its November 30 meeting, which was based on low figures for Libya and Nigeria and included Indonesia, which has since left the group.

Combined output in January from all members is about 520,000 bpd above the target, adjusted to remove Indonesia, the survey showed.

Equatorial Guinea to join OPEC, agrees to production cuts

The Ministry of Mines and Hydrocarbons of Equatorial Guinea says it has submitted its interest to join the Organization of Petroleum Exporting Countries (OPEC) in 2017.

Gabriel Mbaga Obiang, Minister of Mines and Hydrocarbons, travelled to Vienna on January 20 to meet with OPEC officials and present the Government of Equatorial Guinea’s offer to become the 14th member of the cartel.

With 32.5 million barrels per day of output projected this year, OPEC is the world’s largest organization of oil producers. The minister’s trip to Vienna followed the Fourth Africa-Arab Summit, which hosted, last November, several OPEC members in Malabo, the capital of Equatorial Guinea.

“For decades, Equatorial Guinea has achieved a sterling track record as a dependable supplier of petroleum to consumers in all corners of the world. We firmly believe that Equatorial Guinea’s interests are fully aligned with those of OPEC in serving the best interests of the industry, Africa and the global economy,” the minister said.

On December 10, 2016, Equatorial Guinea agreed to join 10 other non-OPEC countries to reduce 558,000 barrels per day of total oil production in 2017. Equatorial Guinea’s share of the cut is 12,000 barrels per day. Even through a two-year sustained slump in oil prices, Equatorial Guinea has maintained liquid output levels at a competitive level.

“There is a consensus amongst producers that an oversupply of oil has been dragging down the price of the barrel,” the Minister said. “Equatorial Guinea is doing its part to ensure stability in the market and that the industry continues to invest in exploring and developing our resources.”

Equatorial Guinea is the third largest oil and gas producer in sub-Saharan Africa. Its $10.6 billion of annual oil and gas exports account for 95 percent of the country’s total exports, with shipments sold every day to China, India, Japan, Korea and many other countries.

The country is investing in the entire energy supply chain through projects such as the Bioko Oil Terminal, the Fortuna Floating Liquefied Natural Gas project, the Riaba Fertilizers plant, compressed natural gas and LNG.

Equatorial Guinea is currently hosting its latest oil and gas licensing round, EG Ronda, putting on offer all of open acreage not currently operated or under direct negotiation.

The country has made 114 oil and gas discoveries to date with a drilling success rate of 42 percent.

SOURCE: Ministry of Mines, Industry and Energy Equatorial Guinea

Oil prices continues to rise as markets eye production cuts

Oil prices rose on Tuesday, the first trading day of 2017, buoyed by hopes that a deal between OPEC and non-OPEC members to cut production would drain a global supply glut.

The deal to cut production kicked in on Sunday.

Benchmark North Sea Brent crude LCOc1 was up 40 cents at 57.22 dollars a barrel by early trading while the U.S. light crude oil CLc1 was up 40 cents at 54.12 dollars a barrel.

Oil futures markets were closed on Monday for New Year public holidays.

Jan. 1 marked the official start of a deal agreed by OPEC and other exporters such as Russia to reduce output by almost 1.8 million barrels per day (bpd).

“First signals suggest the OPEC and non-OPEC production cuts are raising hopes that the global oil oversupply will diminish,” said Hans van Cleef, Senior Energy Economist at ABN AMRO Bank N.V. in Amsterdam.

Ric Spooner, Chief Market Analyst at CMC Markets, agreed.

“Markets will be looking for anecdotal evidence for production cuts.

“The most likely scenario is OPEC and non-OPEC member countries will be committed to the deal, especially in early stages,” Spooner said.

Libya, one of two OPEC countries exempt from the output cuts, has increased its production to 685,000 bpd, from around 600,000 bpd in December, an official at the National Oil Corporation, said on Sunday.

Elsewhere, non-OPEC Middle Eastern oil producer, Oman, told customers last week that it would cut its crude oil term allocation volumes by five per cent in March.

Non-OPEC Russia’s oil production in December remained unchanged at 11.21 million bpd, near a 30-year high.

However, Russia is preparing to cut output by 300,000 bpd in the first half of 2017 in its contribution to the accord.

JUST IN: Non-OPEC states agree to oil cut – first in 15 years

The Organisation of Petroleum Exporting Countries (OPEC) has been joined by non member states, thus, recording the first OPEC and non-OPEC oil deal since 2001.

 

Russia, one of the leading non-OPEC producers, with a number of oil producing countries, agreed to a deal in Vienna, Austria on Saturday afternoon.

 

The deal is expected to see a cut of about 600,000 barrels of oil a day from non-OPEC states, which would further push the price of oil to a record 2016 high.

 

The details of the deal would be made available to the media later on Saturday.

 

More to  follow…

Oil prices rise ahead of meeting of OPEC and non-OPEC producers

Oil prices extended gains on Friday on optimism that non-OPEC producers would agree to cut output following a cartel agreement to limit production.

 

The Organization of Petroleum Exporting Countries (OPEC) will meet non-OPEC nations in Vienna on Saturday to seek their help in curbing a global supply glut.

 

Azerbaijan already said it would come to the Austrian capital armed with proposals for its own reduction.

 

Brent sweet crude for February delivery was up 17 cents at $54.06 a barrel after settling up 1.7 per cent on Thursday.

 

The contract hit its highest since July 2015 at $55.33 on Monday.

 

NYMEX crude for January delivery was up 33 cents at $51.17 a barrel.

 

Russia has said it would cut 300,000 barrels per day, meaning other non-OPEC producers combined would need to pledge the same amount to lower output by the 600,000 bpd.

Oil hits $55.33 high in buying rush after OPEC agreement

Crude rose above $55 a barrel as rising prospects of a tightening market after last week’s OPEC landmark deal to cut production has given speculators impetus to increase bets on higher prices.

Monday’s gains took the rally since the Organization of the Petroleum Exporting Countries’ agreement was struck on Wednesday to 19 per cent for Brent and 16 percent for U.S. crude.

Last week’s 12.2 per cent increase was the largest one-week rise since February 2011.

“OPEC sentiment continues to support oil markets,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam. “Speculative short positions are still at elevated levels and as more traders unwind these positions they could trigger more support for oil prices.”

Brent crude rose to hit 55.33 dollars, its highest since July 2015.

U.S. crude West Texas Intermediate (WTI) traded at a peak point for the day of 52.42 dollars, also the highest since July 2015.

About 380,483 lots of the front-month contract were traded some 57 per cent of the previous session’s volume.

Weekly data from the InterContinental Exchange on Monday showed investors had raised net long positions on Brent to the highest level in four weeks.

After OPEC agreed to curb production by 1.2 million barrels per day (bpd) from January, eyes have now turned to a meeting this weekend between OPEC and non-OPEC producers to expand the deal.

Non-OPEC producers are expected to agree to add an output cut of 600,000 bpd in Vienna on Dec. 10.

Iran, which was granted an output rise as part of the OPEC deal as it recovers production curbed by sanctions, will also attend the meeting, media said.

How Nigeria can benefit from OPEC’s 1.2 million barrels oil cut

Following OPEC’s decision on Wednesday, Nigeria can, in the next one year starting January 1, 2017, pursue programmes aimed at increasing its crude oil production capacity and growing national reserves and exports.

Although pipeline vandalism reduced daily production, sometimes to as low as 1.4 million barrels, Nigeria’s daily production averages about 2.1 million barrels. The country’s aspiration has been to raise that level to about 2.3 million barrels and build national reserves of about 30 billion barrels.

These are some of the benefits the country stands to gain as one of the three countries – out of the 14-member Organisation of Petroleum Exporting Countries, OPEC – granted special concessions from the group’s decision on Wednesday to cut crude oil production by about 1.2 million barrels per day, effective January 1, 2017.

OPEC President, Mohammed Al-Sada, explained that the output cut resolution, which would be binding for the first six months, was subject to a review for another six months, based on the recommendation of the special ministerial committee constituted to monitor compliance by members.

By virtue of the special concession granted during the 171st conference of the group in Vienna, Austria on Wednesday, Nigeria and Libya were completely exempted based on the peculiar circumstances in their countries, while Iran was given partial exemption of the cut.

The gesture, Mr. Al-Sada explained, would enable Nigeria recover from the negative impact of incessant attacks on its oil facilities by armed militant groups in the Niger Delta region, which resulted in a massive cut in its production and exports capacities.

He said Libya was equally granted the special concession following series of attacks on its oil facilities by terrorists groups operating in that region in recent months.

Iran was granted limited concession to allow settle down and recover, after serving years of U.S.-imposed sanctions, including restrictions on its oil production and exports.

The other country not affected by the cut, the first in about eight attempts since 2008, would be Indonesia, which recently opted to suspend its membership of the group till further notice.

Details of the impact of the cut, according to OPEC Secretariat figures, showed that Nigeria and Libya would maintain their pre-October production levels of 2.1 million barrels per day and about 670,000 barrels per day respectively prior to Wednesday’s meeting.

Iran is to cut about 90,000 barrels from its daily reference output of 3.975 million barrels; Algeria, 50,000 BPD from 1.089 barrels; Angola, 80,000 barrels from 1,753 barrels; Ecuador, 26,000 barrels from 548,000 barrels; Gabon, 9,000 barrels from 202,000 barrels and Iraq, 210,000 barrels from 4.561 million barrels.

Other adjustments include Kuwait, 131,000 barrels from 2.838 million barrels; Qatar, 30,000 barrels from 648,000 barrels; United Arab Emirate, 139,000 barrels from 3.013 million barrels and Venezuela, 95,000 barrels from 2.067 million barrels.

The biggest adjustment was to Saudi Arabia, whose 10.544 million barrels daily output would be cut by about 486,000 barrels.

With this arrangement, analysts say Nigeria, which has, for several months, been devastated by a combination of an economy in recession as a result of decline in global oil prices and low oil export earnings following disruptions to oil export facilities, would takes advantage of the concession to recover.

Hours after OPEC announced its resolution on Wednesday, the price of Brent crude, Nigeria’s crude oil blend, jumped by about 8.26 percent, from $46.38 per barrel to about $50.21.

Close followers of the Nigerian situation say the rise in crude oil prices on the heels of OPEC decision was welcome news, particularly to the government in dire need of more revenue to pursue its ambitious infrastructure development programme to provide a solid foundation for economic growth.

Under the ‘seven-big wins’ initiative launched recently, the federal government outlined plans to swiftly increase the country’s daily crude oil production capacity to about 2.3 million barrels and grow national reserves to about 30 billion barrels.

The Minister of State for Petroleum Resources, Ibe Kachikwu, recently announced the signing of an agreement on behalf of the federal government for a $15 billion oil and gas investment package with India to bolster Nigeria’s oil crude production.

graph-opec-share-of-world-crude-oil-reserves-2015

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Nigeria, two others get special concessions as OPEC agrees to cut oil output.

Nigeria, Iran and Libya got special concessions Wednesday, as the Organisation of Petroleum Exporting Countries, OPEC, reached the much-sought consensus to cut oil production by 1.2 million barrels per day, effective January 1, 2017.

The cut, which is the first after eight previous attempts since 2008, is considered a massive boost to efforts by the global oil cartel to shore up oil prices and end a record glut that has paralyzed economies.

It is also seen as a major achievement by OPEC’s Secretary General, Nigeria’s Mohammad Barkindo, whose diplomatic shuttles since assumption of office in August, led to the “Algiers Accord” that sought to stabilize the market and boost price.

OPEC President, Mohammed Al-Sada, who announced the resolution on Wednesday at the end of the body’s 171st meeting in Vienna, Austria, said the adjustment in output would be shared among all members of the group, to bring their ceiling to 52.5 million barrels per day.

The cut is subject to a review after six months, with a possible rollover for another six months on the recommendation of a ministerial monitoring committee of three OPEC counties, namely Kuwait, Venezuela and Algeria. The countries are to closely monitor the implementation and compliance with the agreement.

Mr. Al-Sada, who is also Qatar’s Minister of Energy and Industry, said the latest output cut was subject to another 600,000 barrels expected to be cut by non-OPEC oil producers who have agreed to support the effort to re-balance the market and restore stability.

The OPEC president said the Russian Federation has agreed to take responsibility for about 300,000 barrels per day out of the non-OPEC volume, with final decision expected during a December 9 meeting in Dorha.

The 1.2 million BPD cut followed an agreement by members to implement a deal proposed during the last September meeting in Algiers to reduce crude oil production by at least one million barrels by November.

During the September resolution, three countries, namely Nigeria, Iran and Libya were proposed as candidates for exemptions in consideration of their peculiar circumstances.

Nigeria was recommended for exemption to enable it recover from the negative impact of incessant attacks on its oil facilities by armed militant groups in the Niger Delta region, which resulted in a massive cut in its production and exports capacities.

Libya was equally proposed for special consideration on similar grounds, following series of attacks on its oil facilities by terrorists groups operating in that region in recent months.

But, Iran was to be excluded to allow the country settle down and recover, after serving years of U.S.-imposed sanctions, including restrictions on its oil production and exports.

Although details of each country’s output adjustments were yet to be released by the OPEC secretariat, Mr. Al-Sada said Saudi Arabia, the group’s biggest producer, agreed to the biggest slice of about 486,000 BPD.

At the opening session, OPEC President, Mohammed Al-Sada, said the current situation in the global oil market required urgency in “bringing forward the re-balancing of the fundamentals and returning sustainable stability to the market.”

He said members considered all factors and processes in arriving at the decision, which he said would ultimately help revive the industry and boost reinvestment efforts to raise oil production capacity to secure the mid to long term security of supply

“We knew re-balancing the market will need courageous decisions from OPEC, with the support of some key non-OPEC countries. We agreed to share the reduction among OPEC countries, taking into consideration that some countries needed to be given special considerations because of their peculiar circumstances,” he explained.

The monitoring committee is expected to submit a report to the next meeting of the group scheduled for May 25, 2017.

“This a major step forward to re-balance the market and reduce the stock overhang, will be fair to both consumers and suppliers and ensure that the economy is moved to a healthier level of inflation and growth,” Mr. Al-Sada said.

Oil resumes rise after OPEC cut.

Oil prices resumed their rise Thursday and held above the $50 barrier following OPEC’s decision to carry out its first output cut in eight years.

 

The Organization of the Petroleum Exporting Countries at a meeting in Vienna on Wednesday agreed on specific targets to enact a preliminary deal struck in September designed to ease a global crude supply glut and boost prices.

 

Many analysts had expected the producers’ cartel to fail to reach a deal as major players like Iran, Iraq and Saudi Arabia remained divided ahead of the meeting.

 

Crude futures prices surged more than 10 percent immediately after the OPEC deal.

 

At 0630 GMT Thursday, after a brief dip in early Asian trade, US benchmark West Texas Intermediate for January delivery was up 70 cents or 1.42 percent at $50.14, while Brent crude for February was 81 cents or 1.6 percent higher at $52.65.

 

“Not only had hopes of higher prices been realised, the reputation of the OPEC has also been salvaged, prompting the surge,” said Jingyi Pan, market strategist at IG in Singapore.

 

“Sceptics have now placed their focus on the implementation of the OPEC deal where Saudi Arabia will be shouldering the bulk of the cut.”

 

The 14-member OPEC agreed to lower its monthly output by 1.2 million barrels per day (bpd) to 32.5 million bpd from January 1.

 

Qatar’s Energy Minister Mohammed Bin Saleh Al-Sada said non-member Russia committed to reducing its output by 300,000 bpd, half of a hoped-for 600,000 bpd reduction from outside the organisation.

 

Prices had fallen to near 13-year lows of below $30 a barrel in February from peaks of more than $100 in June 2014 largely due to an oversupplied market outpacing demand.

OPEC President optimistic of consensus on oil output cut.

The President of the Organisation of Petroleum Exporting Countries, Mohammed Al-Sada, has said he is optimistic members would agree to cut oil production as the 171st meeting of the group begins on Wednesday in Vienna, Austria.

In his opening address to the conference, Mr. Al-Sada, who is also Qatar’s Minister of Energy and Industry, said the situation in the global oil market required urgency in “bringing forward the rebalancing of the fundamentals and returning sustainable stability to the market.”

He said since its last meeting in September 28 in Algiers, OPEC Reference Basket of crude oil price was just above $42 per barrel.

The agreement by members during the meeting to cut production by almost one million barrels per day, he pointed out, had halted further decline in prices and reduced volatility, with prices climbing above $49 by mid-October.

However, Mr. Al-Sada noted that prices had gradually dropped from November 14 to below $41 per barrels, showing that price volatility was still a significant concern.

Although the OPEC president said a review of the supply and demand perspectives of the market revealed the beginning of the rebalancing of the fundamentals, he emphasised the need for urgent actions to stabilize the market for good.

“This year, we expect non-OPEC oil supply to contract by 800,000 barrels a day, compared to growth of 1.5 million barrels a day in 2015.  And in 2017, we only foresee a small growth in non-OPEC supply of 200,000 barrels a day,” Mr. Al-Sada said.

With world oil demand expected to grow at about 1.2 million barrels per day in both 2016 and 2017, he said global economic growth forecasts remained reasonable for both 2016 and 2017, at 2.9 per cent and 3.1 per cent respectively.

Expressing worry about the continued large stock overhang throughout the year and recent price volatility, Mr. Al-Sada said these have only underscored to all producers the gravity of the situation and the need to unite and take action.

“It is also important to underscore that we need to not only consider the short-term, but the medium- and long-term as well. Of course, the short-term directs our current thinking, but as we all know, this is very much a medium- to long-term business,” he said.

With oil demand in OPEC’s 2016 World Oil Outlook projected at over 109 million barrels a day by 2040, an increase of over 16 million barrels per day, the OPEC president said to meet this would require over $10 trillion investments in the upstream, midstream and downstream sectors of the industry.

At the end of the meeting, members are expected to take a decision to implement the September 28 resolution to reduce crude oil production by about one million barrels per day (bpd), from about 33.82 million bpd in October, to stabilize the market and boost prices.

Although ahead of the meeting, there were reports of divisions in opinions between OPEC and non-OPEC countries on the way forward, Mr. Al-Sada said he was confident about a consensus to move forward.

He said since the resolution, a high-level committee led by the group’s Secretary General, Nigeria’s Mohammed Barkindo, to study and recommend the implementation of member countries’ production levels had done enough work to ensure a positive consensus at the meeting.

“I am very hopeful that the positive talks will continue here in Vienna today leading to a mutually acceptable solution on the way forward. OPEC fully appreciates the importance of bringing forward the rebalancing of the fundamentals and returning sustainable stability to the market. This will be beneficial to our economies, the global oil market and the world economy as a whole,” he said.

The outcome of the meeting would be known later today.

Oil Prices Fall as OPEC Fails to Stop Excess Production

Oil prices dipped Tuesday as expectations dimmed of an OPEC agreement to reduce the cartel’s gushing of crude into the massively saturated global market by around a million barrels per day.

Prices were also hit as non-OPEC Russia confirmed it would not send a delegation to the Organisation of the Petroleum Exporting Countries’ meeting in Vienna on Wednesday.

In late morning European trading, US benchmark West Texas Intermediate for delivery in January was down 73 cents a barrel to $46.35, in what market analyst Jasper Lawler at CMC Markets called “heebie-jeebies” on the eve of the talks.

Brent North Sea crude was down 0.72 cents to $47.52.

Analysts expect further falls if OPEC fails to agree on Wednesday its first joint output cut in eight years in an effort to reduce the global glut and so lift prices.

The group’s big players — Saudi Arabia, Iran and Iraq — disagree on what size cuts each member will make, and the cartel wants non-OPEC countries like Russia to reduce production too.

Russia is currently pumping some 11 million barrels per day, a level not seen since Soviet days. Hit hard by the low price and Western sanctions, Moscow has said it is ready to freeze output but not to cut it.

While making life cheaper for consumers and businesses, two years of low prices have wreaked havoc with the public finances of OPEC member states, even in the wealthy Gulf states.

But Iraq and Iran, OPEC’s biggest producers after Saudi Arabia, on Monday continued to express objections to a proposal to cut up to 1.2 million barrels per day from October levels, Bloomberg News reported, citing an OPEC delegate.

In a 10-hour meeting, Iran said it might be ready to freeze production at about 200,000 barrels a day above its current output of around 3.975 million bpd, Bloomberg said.

Saudi Arabia hit back, saying Tehran should freeze its production at just over 3.7 million bpd — more or less its current level.

Iran has consistently said it won’t cut production until it has reached pre-sanctions levels. It is also a fierce regional rival of Saudi Arabia, engaged in a proxy war in Yemen and backing different sides in Syria.

Iraq meanwhile has said it will cut output but that it is short of money needed to fight Islamic State extremists. It also disputes with OPEC the level of its current output.

OPEC kingpin Saudi Arabia added to the pessimism about prospects for a deal on Sunday by appearing to say it could live without an agreement.

Recovering demand, said Energy Minister Khaled al-Falih — due in Vienna later Tuesday — would “stabilise” prices in 2017 anyway.

Prices had made a slight recovery Monday after Iraqi Oil Minister Jabbar al-Luaibi sounded an upbeat note as he arrived in Vienna, saying he was “optimistic” that the 14-country group would strike an accord.

Algeria, which is trying to mediate a deal, on Monday proposed a compromise with Iran capping its production at 3.795 bpd, delegates said, according to Bloomberg.

However, there has been no indication that any such proposal will actually be accepted when the oil ministers meet on Wednesday.

Bjarne Schieldrop, chief commodities analyst at top Nordic corporate bank SEB, said that the chances of an output cut are now “very low”.

The best possible result, at this stage, was that the club would end up with a face-saving deal while “kicking the can to the next OPEC meeting in half a year’s time”, Schieldrop said.

Oil prices hit highest since October in anticipation of OPEC-led output cut.

Oil prices rose to their highest level since October on Tuesday as the market priced in an expected output cut led by producer cartel OPEC, but analysts warned that a failure to agree on a cut could lead to a deepening supply glut by early 2017.

International Brent crude oil futures rose as high as $49.63 a barrel on Tuesday, up 1.5 percent from the last settlement and the highest since Oct. 31, before dipping back to $49.22 per barrel at 0735 GMT, still up 32 cents, or 0.65 percent.

U.S. West Texas Intermediate (WTI) crude futures were up 35 cents, or 0.73 percent, at $48.59 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) is trying by Nov. 30 to bring its 14 member states and non-OPEC producer Russia to agree on a coordinated production cut to prop up the market by bringing production into line with consumption.

“With investors becoming more optimistic about OPEC reaching an agreement on production cuts, oil prices should continue to edge higher,” ANZ bank said on Tuesday.

“The single most important country in OPEC, Saudi Arabia, wants it (a production cut)… OPEC’s leadership is cognizant of the risks posed by failing to reach a deal,” RBC Capital Markets said on Tuesday in a note to clients.

“Another fall in oil prices could plunge the (Saudi) Kingdom further into the red, imperil key initiatives (e.g., Aramco IPO), and raise the prospect of higher borrowing costs,” it added.

Goldman Sachs said in a note to clients that the chances of an OPEC cut had increased as producers needed to react to eroding supply and demand fundamentals, which the bank said “have weakened sharply since OPEC announced a tentative agreement to cut production.”

Should OPEC and other producers, especially Russia, fail to agree a cutback, Goldman said it expected an oil supply surplus of 0.7 million barrels per day (bpd) for the first quarter of 2017.

Nigeria Records Increased Oil Output Ahead OPEC Production Cut Talks

The Organisation of the Petroleum Exporting Countries agreed in September in Algiers to trim production but the accord still has to be finalised on November 30 in Vienna.

In its November monthly report, OPEC said that its 14 members pumped 33.64 million barrels a day (mb/d) in October, 236,000 barrels more than in September.

Saudi Arabia’s output fell 51,700 bpd to 10.5 mb/d but Iraq and Iran, the next biggest producers, registered increases, as did Libya and Nigeria, the report said.

Iran, Saudi Arabia’s arch foe, in particular is keen to keep the taps open following the lifting of international sanctions under last year’s landmark nuclear deal.

The OPEC report chimed broadly with figures released Thursday by the International Energy Agency, which put cartel output at 33.8 mb/d.

The IEA said this was “well in excess” of the 32.5 mb/d to 33.0 mb/d range agreed by OPEC in September.

“This means that OPEC must agree to significant cuts in Vienna to turn its Algiers commitment into reality,” the IEA added.

The September agreement lifted oil prices but they remain hovering at around $45 per barrel.

On Friday late morning Brent North Sea was trading at $45.44 in London, down $0.40 from Thursday. West Texas Intermediate (WTI) was down $0.57 at $44.09 on the Nymex.

Credit: AFP

Nigeria’s oil production boosts OPEC’s October output to 33.54mbpd

Oil production from the Organisation of the Petroleum Exporting Countries (OPEC) rose to another record, hitting 33.54 million barrels per day (b/d) in October.

The figure was significantly boosted by recoveries in Nigeria and Libya and more than offset field maintenance in Angola.

The gains, which total 300,000 b/d from September and marks the fifth consecutive month of increased production, further complicate the path for OPEC to freeze production between 32.5 million to 33 million b/d in order to support prices and accelerate the drawdown of inventories.

“OPEC’s freeze math has gotten more complicated as its countries keep pumping more,” said Herman Wang, senior writer for S&P Global Platts.

“With OPEC having self-imposed a November 30 deadline to finalise the freeze, the pressure will be on it to deliver a deal that the market views as credible. Progress towards that goal has been slow, and a fifth straight month of record high production won’t help.”

Nigeria and Libya are exempt from the freeze, according to the plan announced in Algiers five weeks ago, but increases in Iraq and the expected return of Angolan production once the Dalia field maintenance is complete will make it harder.

Meanwhile, Saudi Arabia, which is expected to bear the brunt of any cuts that the producer group implements, saw its output decline to 10.53 million b/d for October, with reduced crude consumption for power generation as the peak summer air conditioning season ended.

Nigeria, which resumed loadings of key export grades, Qua Iboe and Forcados, in late September, saw its production recover to 1.68 million b/d in October, as the exports of all of its key exports grades have resumed.

But the volatile Niger Delta remains unstable and sensitive, with chances of more militant attacks high, which means production is still at risk.

Forcados production, which only resumed a month ago, is expected to be affected this month after militants bombed the Trans-Forcados pipeline last Wednesday.

Libya’s production rose to an average of 530,000 b/d in October, as it continues to ramp up after exports from some if its eastern ports have resumed.

Libya’s output has more than doubled since August, as production recovered sharply following news in September that Libya’s state-owned National Oil Corporation (NOC) had lifted force majeure at the 360,000 b/d Es Sider terminal and also the 220,000 b/d Ras Lanuf and 70,000 b/d Zueitina terminals.

NOC chairman, Mustafa Sanalla, told S&P Global Platts that Libyan oil production was now 585,000 b/d, and also that the Es Sider terminal, which has been down since December 2014, was ready to begin loadings “within days.”

Production in fields operated by the Waha Oil Company, Harouge Oil Operations and Arabian Gulf Oil Company have also increased in the past few months.

Angola production declined to 1.47 million b/d, as the key Dalia field which produces around 200,000-250,000 b/d was down for maintenance the entire month. Output is expected to come back online this month.

Final details of OPEC’s freeze including individual country allocations and which production estimates are used to verify compliance are to be decided by the organisation’s next formal meeting, November 30, in Vienna.

OPEC ministers on September 28 agreed to a preliminary deal to freeze production between 32.5 million and 33 million b/d.

The organisation had been operating without any official output ceiling since December 4, 2015 when it scrapped the 30 million b/d ceiling that it had in place since January 2012.

OPEC will hold its next ministerial meeting on November 30 in Vienna, when details of the freeze agreement are supposed to be finalised.

Gabon officially rejoined OPEC on July 1 while Indonesia reactivated its membership at the December 2015 meeting.

The estimate for Iraq includes volumes from semi-autonomous Iraqi Kurdistan.

Iraq, the cartel’s second largest producer, had output of 4.56 million b/d in the month, on increased exports. Its oil exports in October were boosted by higher loadings from the southern terminals along with a rise in pipeline exports from the Turkish port of Ceyhan.

The country, which has disputed secondary source estimates – including from Platts used by OPEC to determine each country’s monthly output – invited several media organisations to Baghdad last month to detail its field-by-field production.

Iraqi oil officials have been adamant that Iraq will “not back down” and will continue to produce at current levels, regardless of whatever freeze agreement is reached. Its official production figure of 4.774 million b/d for September is higher than independent estimates, as it appears to be double-counting some production in the semi-autonomous Kurdistan Regional Government.

Iraqi officials have complained that the lower estimates could put the country at a disadvantage when OPEC decides the quotas under the freeze.

Iran’s production rose slightly in October to 3.67 million b/d, according to the Platts survey, as exports reached a post-sanctions high on increased interest from Europe on top of strong demand in Asia.

The country, which has also complained about secondary source estimates of its output being too low, has said it intends to regain its pre-sanctions production level of about four million b/d before it agrees to any freeze plan.

Analysts have, however, said Iran is unlikely to be able to raise its production much further without significant investment.

Oil Prices Surge 6% After OPEC Cuts Production For First Time Since 2008

The world’s leading oil nations – known as Opec – have struck a landmark deal at talks in Algeria that sees the countries agree to cut output and lift prices.

Oversupply has been dogging the world’s oil markets and hopes are that the first deal between the nations since 2008 will mark the end of the ‘dumping’ strategy previously favoured by the organisation’s members.

Immediately after the deal was agreed oil prices rose, with Brent Crude – the international benchmark – rising almost 6 per cent to nearly $49 a barrel last night.

Iran’s Oil Minister Bijan Zanganeh said: ‘Opec made an exceptional decision today. After two and a half years, OPEC reached consensus to manage the market.’

He added: ‘We have decided to decrease the production around 700,000 barrels per day.’

Oil ministers said full details of the agreement would be finalised at a formal Opec meeting in November when an invitation to join cuts could also be extended to non-OPEC countries.

Markets now have to wait and see whether non-OPEC producers such as Russia, the United States and Canada will make cuts of their own.

The agreement sees output fall by about 700,000 barrels a day, although the cuts will not be distributed evenly across the cartel, with Iran being allowed to increase production.

The deal is even more remarkable given that disagreements between Iran and its regional rival Saudi Arabia had thwarted earlier attempts to reach any agreement.

Analysts said the deal shows Opec – whose members account for around 40 per cent of global supply – has finally woken up to the reality of oversupply and the damage its policies has caused the oil industry.

OPEC approves first oil output cut deal since 2008

Members of the Organisation of Petroleum Exporting Countries (OPEC) agreed yesterday, to cut oil output for the first time since 2008, with Saudi Arabia softening its stance on arch-rival, Iran, amid mounting pressure from low oil prices.

A report which quoted two sources in the organisation said the group would reduce output to 32.5 million barrels per day from current production of 33.24 million bpd.

The sources however could not tell how much each country will produce, saying that is to be decided at the next formal meeting of OPEC in November, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia, sources said.

Oil prices jumped more than five per cent to trade above $48 per barrel after the outcome of OPEC’s informal meeting in Algeria took traders by surprise. Still, many said they wanted to see the details of the deal.

“We don’t know yet who’s going to produce what. I want to hear from the mouth of the Iranian oil minister that he’s not going to go back to pre-sanction levels. For the Saudis, it just goes against the conventional wisdom of what they’ve been saying,” said Jeff Quigley, director of energy markets at Houston-based Stratas Advisors.

Saudi Energy Minister Khalid al-Falih said on Tuesday that Iran, Nigeria and Libya would be allowed to produce “at maximum levels that make sense” as part of any output limits which could be set as early as the next OPEC meeting in November.

That represents a strategy shift for Riyadh, which has said it would reduce output to ease a global glut only if every other OPEC and non-OPEC producer followed suit. Iran has argued it should be exempt from such limits as its production recovers after the lifting of EU sanctions earlier this year.

The Saudi and Iranian economies depend heavily on oil but in a post-sanctions environment, Iran is suffering less pressure from the halving in crude prices since 2014 and its economy could expand by almost 4 per cent this year, according to the International Monetary Fund.

Riyadh, on the other hand, faces a second year of budget deficits after a record gap of $98 billion last year, a stagnating economy and is being forced to cut the salaries of government employees.

OPEC Calls Informal September Meeting

OPEC said on Monday it has called an informal meeting of member countries for next month in Algeria to help stabilise the oil market.

The Vienna-based Organisation of the Petroleum Exporting Countries said in a statement that the meeting would take place on the sidelines of the International Energy Forum in Algeria from September 26 to 28.

“OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market,” it said.OPEC President Mohammed Bin Saleh Al-Sada reiterated the organisation’s view that oil demand will pick up in the third and fourth quarters of this year.

OPEC sees recent oil price declines and current market volatility as “only temporary” and due to weak refinery margins, an inventory overhang and the impact of Britain’s decision to leave the EU on the crude oil futures market.

An expected return of economic growth in oil-consuming countries would rekindle demand for oil in the remainder of the year while oil supply would tighten, leading to higher prices.

Al-Sada added that more investment in oil production was needed to meet growing demand and offset declining output from existing wells.

Read More:

http://guardian.ng/news/opec-calls-informal-september-meeting/

 

Nigeria’s Oil Output Rises To 1.6mbpd, Barkindo Appointed OPEC Secretary-General

Nigeria’s crude oil production has climbed to 1.6 million barrels per day (mbpd), following repairs on some of the oil and gas installations damaged by militant groups in the Niger Delta, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, disclosed yesterday.
According to reports from Reuters and Bloomberg, Kachikwu said in Vienna, Austria, where oil ministers of the Organization of Petroleum Exporting Countries (OPEC) unanimously appointed the former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Mohammed Barkindo, as the cartel’s Secretary-General, that the country’s production had rebounded to this level after it fell to about 1.4mbpd in May due to a string of militant attacks and an accident on the ExxonMobil Qua Iboe export platform.
He also said despite continued attacks by militants in the restive Niger Delta, Nigeria was still on target to produce 2.3mbpd in 2016.
His disclosure also followed reports that OPEC, which appointed Barkindo, has again failed to agree on production cuts or freeze to shore up crude oil prices in the international market as disagreements between two Middle East rivals, Saudi Arabia and Iran, resurfaced.
Barkindo by his appointment becomes the second Nigerian, after former Minister of Petroleum Resources, Rilwanu Lukman, to serve as the oil cartel’s secretary-general.
Kachikwu, in a tweet from his tweeter handle, confirmed Barkindo’s appointment. He also congratulated him on the feat.
“Congratulations to Dr. Barkindo Sanusi Barkindo on your appointment as OPEC Secretary General,” Kachikwu tweeted.
Kachikwu was credited with playing a huge role in Barkindo’s emergence as the cartel’s secretary-general, as the minister was said to have worked hard behind the scenes at convincing OPEC’s influential members to allow a Nigerian to oversee the administration of OPEC’s headquarters in Vienna.
Similarly, Indonesia’s Energy Minister Sudirman Said disclosed in Vienna that Barkindo’s appointment was by consensus.
Barkindo will succeed outgoing Abdalla El-Badri who had been on the job for nine years. Barkindo was also the acting head of OPEC in 2006.
Credit: Thisday

Oil Drops In Cautious Trade Ahead Of OPEC

Oil prices dropped Wednesday, as traders trod cautiously before this week’s OPEC meeting in Vienna, and set aside upbeat Chinese data. The market has however rebounded strongly from January lows of under $30 per barrel, and last week topped $50 for the first time this year on production outages in Canada and Nigeria.

But oil has since retreated and remain at less than half of their 2014 peaks of over $100 because of chronic global oversupply. At about 1145 GMT, US benchmark West Texas Intermediate for delivery in July weakened 64 cents to $48.46 per barrel.

Brent North Sea crude for August delivery, a new contract, also fell 64 cents to $49.25 a barrel compared with Tuesday’s close. “Brent crude continues to be constrained by the $50 per barrel level ahead of tomorrow’s bi-annual OPEC meeting,” noted Inenco analyst Dorian Lucas.

The 13-member Organization of the Petroleum Exporting Countries (OPEC) meets on Thursday for its first meeting with Saudi Arabia’s new oil minister — a close ally of Prince Mohammed bin Salman, who has been outspoken about not reducing oil production. The recent recovery in prices has eased pressure on the group to turn down the taps at this week’s gathering, analysts say. “This week’s OPEC meeting could be quite interesting, although with oil prices where they are, I would be very surprised if any plans to cut or freeze production are announced,” noted Oanda analyst Craig Erlam.

OPEC, which pumps around a third of the world’s oil or some 30 million barrels every day, has historically responded to a fall in prices by cutting production. But in the current cycle producers led by kingpin Saudi Arabia have changed strategy, maintaining output even with lower prices in order to pressure US shale producers.

Credit: vanguardngr

Oil Price Rises To $33pb As Russia Okays OPEC’s Position

Hope was rekindled yesterday after crude oil price rose 40 cents to $33.12 per barrel, paring earlier losses after fresh comments from Russia about its openness to talk with the Organization of the Petroleum Exporting Countries (OPEC) over output cuts.

Russian foreign minister, Sergei Lavrov, said if there is consensus among OPEC and non-OPEC members to meet, “then we will meet”.

This helped push the price of oil, which had been set for a third day of decline after data on Tuesday showed another big build in U.S. inventories, off the day’s lows.

Brent for April delivery rose 40 cents to $33.12 a barrel, pulling away from a session low of $32.30.

US crude futures rose 46 cents to $30.34, off a session low of $29.40.

“Is there going to be a meeting between Russia and OPEC? That is a supportive factor in this rally that we’ve seen in the last one hour,” PVM Oil Associates analyst, Tamas Varga, said.

Oil is the mainstay of the Nigerian economy and the country is reeling from huge revenue loss following the crash of crude oil price.

Credit: Leadership

Nigeria, Iran Clash Over OPEC Emergency Meeting

With the global economy reeling from plunging oil prices occasioned by massive over production, Nigeria, a key member of the Organisation of Petroleum Exporting Countries (OPEC), which depends hugely on oil revenue for its foreign exchange, has requested an emergency meeting to discuss steps to possibly cut down oil production and prop up oil prices.

But Nigeria’s call has been opposed by Iran, another prominent OPEC member, which claimed that the time is not yet right for such an intervention.

Minister of state for petroleum resources, Dr Ibe Kachikwu, made the call for an OPEC emergency while speaking at a panel session at the ongoing World Economic Forum at Davos, Switzerland, adding Nigeria’s voice to those of OPEC members, such as Venezuela, that are requesting an emergency meeting of the oil-producing nations to address the current oil crisis.

Speaking at the session, Kachikwu stated that with the oil industry in its current state, the members of the OPEC, which produce about one-third of the world’s oil, needed to do something proactive soon.

He said, “There is a lot of energy around trying to meet earlier. Obviously, some of that is a panic reaction. Do we just sit back and watch? Or do we put more efforts in talking to countries, like Russia, to try to get some consensus of what we need to be doing?”

However, Iran disagreed with the premise of an emergency meeting as the country’s oil minister, Bijan Zanganeh, stated that the organisation currently has little intention of making a drastic change.

“There should be an intention to make a firm decision in such a meeting; otherwise, the meeting will have negative impacts on world oil markets. The important thing is that there must be an intention for change, but we have not yet received such a signal,” the oil minister said, according to Reuters.

Credit: Leadership

Fear Grips OPEC Over Iran’s Threat To Increase Production By 500,000bpd

Members of Organisation for Petroleum Exporting Countries, OPEC, are beginning to panic after Iran declared on Saturday that it would increase its oil export production by 500,000 barrels per day.

 
Since the sanction was lifted, oil prices hit their lowest since 2003 on Monday.

 
The United States and European Union on Saturday revoked sanctions that had cut Iran’s oil exports by about 2 million barrels per day (bpd) since their pre-sanctions 2011 peak to little more than 1 million bpd.

 
Despite repeated warnings and pleadings by OPEC, Iran, also a member of the Organization of the Petroleum Exporting Countries (OPEC), insisted on Sunday that it would go ahead with export increase.

 
Worries about Iran’s return to an already oversupplied oil market drove down Brent crude LCOc1 to $27.67 a barrel early on Monday, its lowest since 2003. The benchmark was at $28.59 by 0921 GMT, down 38 cents from its settlement on Friday.

 
As at Friday, January 15, OPEC’s daily basket price stood at $24.74 a barrel, and analysts still predict a drop to $10 as Iran starts pumping more oil into the market.

 
U.S. crude CLc1 was down 38 cents at $29.04 a barrel, not far from a 2003 low of $28.36 hit earlier in the session.
“Iranian export is coming at a very bad time,” analysts at Barclays said.

 
The ban cut the country off with nearly 80 million population from the global financial system, drastically reduced the exports of a major oil producer and imposed severe economic hardship on ordinary Iranians.

 
In retaliation, Iran wants the world to feel the hardship it suffered through the years of denial, as the country sees its recent freedom as a means of making more money and boosting the economic standard of its people through increased export.

 
What this means for OPEC members, is untold hardship as it is presently being experienced, with members countries already cutting down on developmental projects and continuous fall in the value of their currencies. For, instance the official value of the naira, Nigeria’s currency is presently N196.5k to one dollar but it traded at about N297 to the dollar in the parallel market.

 

 

Credit : Today.ng

Nigeria Rules Out Cutting Oil Production In Isolation Of OPEC

Nigeria said wednesday it would not cut oil production outside the framework of the Organisation of Petroleum Exporting Countries (OPEC), even as nose diving crude prices caused by a global supply glut have ravaged its revenue.

US crude oil prices fell below $30 a barrel on Tuesday, prompting Nigeria, an OPEC member country, to call for an emergency meeting to address collapsing prices that have drained the coffers of Africa’s largest economy.

Minister of State for Petroleum, Dr. Ibe Kachikwu, said in Abu Dhabi on Tuesday that he expected an extraordinary meeting of the global oil cartel in “early March” to discuss the continued plunge in prices.

His push for an emergency meeting was however opposed by the United Arab Emirates, which like Saudi Arabia has resisted calls for production cuts by the oil cartel in order to retain market share.

But until the meeting is formally confirmed, Nigeria can do little in response to the collapsing price of crude, said the Nigerian National Petroleum Corporation’s (NNPC) head of marketing, Mr. Mele Kolo Kyari.

“Nigeria cannot stop the prices of crude from going down,” he told AFP in Abuja.

“The easiest thing to do is to control production but Nigeria can only do that through the OPEC framework and the last OPEC meeting did not agree to cut down production.

“So influencing the price through production is now out of the question.”

Saudi-led Gulf exporters within OPEC have so far refused to cut production to curb sliding prices, seeking to protect their market share despite a heavy blow to their revenues.

Credit: ThisDay

Pres. Buhari Set To Become Next OPEC President – Report

President Muhammadu Buhari is set to become the next President of the Organisation of Petroleum Exporting Countries (OPEC), as Nigeria still retains its seat, an official of the Nigerian National Petroleum Corporation (NNPC) said on Thursday in Abuja.

The official, who preferred anonymity, said the exit of the former Minister Petroleum Resources, Mrs Diezani Alison-Madueke, had nothing to do with the status of Nigeria as the President of the organisation.

The official said the position would be filled after the appointment of a new Minister of Petroleum by the president. It is widely believed that President Buhari will double as the Minister of Petroleum in a bid to rid the ministry of the massive corruption that has plagued it.

The official said the former minister was elected at the 166th General Meeting of the OPEC, not in her own capacity but to represent Nigeria.
Alison-Madueke was elected the president of the international oil body on Nov. 27, 2014 but started to function in the office in January 2015.
The president of OPEC, according to the official, is expected to serve for a period of one year and to preside over the meetings of the conference in the course of that presidency.

OPEC, the source says, has Alternate President who exercises the responsibilities of the President during an absence, or when the incumbent s unable to carry out the responsibilities.

I Have Done My Best For Nigeria – Alison-Madueke

Diezani Alison-Madueke, minister of petroleum resources, says she has done her best for Nigeria and have attained many firsts in the history of oil and gas in the country.

She noted that having performed optimally there is no need for her to seek any soft-landing from the incoming administration because she has not committed any crime. She also said the report that she has sought, but refused asylum outside the country was false. She said though she had stepped on big toes during her tenure, she would rather not go anywhere.

Alison-Madueke made the comments to journalists on Wednesday.

“I have not sought such assistance because I am not aware that I have been indicted of any crime that I will need a soft landing. Over the last four years, I have been severally and unfortunately accused and labelled in so many malicious and vindictive ways. I have explained these things and pushed back robustly on these accusations and I have even gone to court on many of them. Yet they keep being regurgitated.

“I think it is unfortunate, particularly when we are moving into a transition period and looking forward to an incoming government which is coming to take over where we have ended. For everything that has a beginning there is an end and that is not a surprise. What is the surprise is the sort of malevolence bothering on personal malicious libel to my person during this period of time.

“I do believe that I have done the best for Nigeria in this job and I have attained many firsts in the history of oil and gas especially in the reforms that we have done. In this period of time, I have stepped on many big toes, particularly the toes of the cabals that were in the industry when we came in.

“I have said severally that we will open up the industry to all Nigerians, and we have, but that is not to the pleasure of certain cabals. And I have been continuously maligned because of this. We have taken millions and in fact billions of dollars out of the hands of multinationals and their subcontractors and put them in the hands of Nigerians through the Nigerian Content. Hundreds of thousands of Nigerians have come into the oil and gas industry because of our reforms.

“Quite frankly, I think as unprecedented as it is, it does not please everybody and that cannot be helped but let us remember the unprecedented reforms that have happened in the oil industry during our time, such as major gas reforms, the Petroleum Industry Bill, which has been completely revised, reformed and put into the hands of members of the National Assembly where it has languished for two years.”

She also spoke on the alleged missing funds from the coffers of the Nigerian National Petroleum Corporation (NNPC) as well as allegations of wasteful spending by her. According to her, some of the allegations were made because of the reforms contained in the PIB. She said:

“In that bill are all the reforms needed to tear NNPC apart, make it a National Oil company, an equity share company through transparency, accountability and responsibility and reduce corruption in the industry. We did all theses and we put them in place to reduce corruption, so for me to be tagged with various tags of corruption, $10 million jet purchases, who buys jet for $10 million dollars for goodness sake?

“And $20 billion missing money for which PWC had done a report and the $1.48 billion which is not missing, which is actually money transferred by the NNPC to NPDC which is a subsidiary and NPDC has actually started making payments under my directives. I have said during our time that there are gaps in the NNPC and I said that openly.

“But I can also say that at no time in Nigerian history in the oil and gas has the NNPC been as open and audited as it is today. It has been positioned to go forward in the industry. It is true that the revenue profile is not sustainable. But we have done our best and the Nigerian oil and gas sector is today in a better shape than it has ever been in terms of achievements that we have recorded.

“So let me state it clearly for the records that Nigeria is my country and I am not going anywhere. I love my country and I do think that I have done the best for my country and I would also like to point these malicious, malevolence, vindictive libels need to stop.

“We have done enough for this industry, we cannot please everybody. Yes, we have stepped on toes but we did that in the best interest of Nigeria and we have opened up the oil and gas industry to all Nigerians, thousands of Nigerians have benefitted from our reforms in the system.”

The Robber State Can Now Drink Her Oil By ?Erasmus Ikhide

THE hope of restoring normalcy to a morally bankrupt nation to a place in the sun greater than it had ever been is ebbing gradually. Nigeria is in economic straits, maimed by official corruption, which slices off more than 50 % of her GDP in revenue. The nation’s oil deals which has been shrouded in the caucuses of bargaining and appalling crudity has left the people in abject poverty.

But President Goodluck Jonathan’s sidekick wouldn’t have any of such. They are used to thinking that the ugly picture is a mere grotesque hodgepodge concocted by half-baked, uneducated neurotics who are bent on sabotaging the humane president. It’s time Mr President summon the moral courage and pledge the reversal of the nation’s menacing presence and the future.

Regrettably, the argument of Jonthanians is not supported by Mr president’s broken promises, overt corruption, oil theft and pipeline vandalism. The gruelling grind of irony in a land flowing with energy under its belly vanquished presidential hollowness for its failure to boon the economy.

In 2011 NNPC signed a USD28.5 billion Memorandum of Understanding, MOU with the Chinese to build the  NNPC Greenfield Refineries in Bayelsa, Kogi, and Lagos States’. So far, none has been built, four years down the road. In 2012 at the Nigerian Oil and Gas Conference, the bogey minister promised that Turn Around Maintenance’, TAM, will gulf USD700 million, which amounts to USD2.8 billion – for the four refineries within 12 months.

As we speak, none of the four Nigerian Refineries operates with more than 60% capacities. Kaduna refinery operates below 30% of her installed capacity. That is after billions of and billions of dollars was expended.P How else can we explain that TAM was a waste of our common patrimony and the crudest form of corruption? The four refineries can produce 445,000 barrel of oil per day, if they are functioning at 100% capabilities; which is still  below Nigeria’s current need of about 39 million litres according to the PPPRA per day!

President Jonathan’s government expended trillions of dollars in the so-called Fuel Subsidy that was reeked with hyper-corruption. When Nigerians protested the enrichment of the president’s cronies with the oil scam, Mrs Diezani Allison-madueke deadened her concerns scornfully and bluntly told the nation to go to hell or that the Fuel Subsidy would be reduced by half any time she choses.

It was a show of sheer unconcealed disdain for the Nigeria masses. The protest against Fuel Subsidy was partly against her career of gross abuse of office and blatant assault on the volition of the people to benefit from the resources of their nation. While the people haggled and groaned under the excruciating  fuel’s price spike, the federal government remained blunted in her constitution responsibilities to the electorate.

That profound deadening of consciousness is the sheerest  negation of nation-building, where the peoples’ demand for access to common till is viewed as doing them favour. Any surprise that President Jonathan gloated and gloried suppressing protesters who seek the reversal of fuel increments in the past? Even after many people have lost their lives, all the promises of palliatives never came.

Till now, the consistent figure of the about N200 billion the Petroleum Products Pricing Regulatory Agency, PPPRA, pays to petroleum marketeers quarterly for subsidy hasn’t changed. Yet, Nigeria remains one of the few OPEC members still importing majority of Refined Petroleum products to the tune of over USD15 billion yearly.

There is no doubts that the Petroleum Industry Bill, PIB, has accumulated dust wherever is it kept. This is due largely to the frosty relationship between the Hon. Minister and the Natioal Assembly members. This has resulted into her getting Court Injunction stopping them from investigating the alleged N10 billion allegedly expended on private jets. This is away from the USD20 billion missing in the NNPC accounts as alleged by the former CBN Governor, Sanusi Lamido Sanusi, now the Emir of Kano.

The Presidency is aware that the no-passage of the Petroleum Industry Bill, PIB, is gravely affecting investment in the oil and gas industry and that the continues delay is inimical to the nation’s economy. The passage of the PIB would have fast-tracked the exploration of oil in many part of the country where oil has recently been discovered.  The President is also aware that the passage of PIB will steam the tide of mega-corruption and the suitcase oil portfolios will come to an abrupt end.

We are back to the same position. My former union, Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, in alliance with the Petroleum and National Gas Senior Staff Association of Nigeria, PENGASSAN, has embarked on industrial action, grounding the already traumatised economy for lack of faith in the government of the day. The oil unions are accusing the president of inability to fix existing and build new refineries, bad roads, arbitrary sacking of union members by oil companies. The Trade Union Congress even took it further.

Arising from its Nation Executive Council, NEC, the central labour union enthuse: “The congress expresses dismay that the prices of refined petroleum products have remained unchanged despite the significant fall of crude oil prices which the CBN acknowledged as a steady one. “We therefore called on the government to direct the appropriate agency to respond by adjusting the pump price of petroleum products, which will ameliorate the impact on the purchasing power by the devaluation of the Naira.

Now, Nigerians are reminded to be contented with the oil goddess with the burning beauty who the alternate lot falls upon as the OPEC’s Chairman that becomes a shinning jewel  on her scrap-iron crown! A fourth-grade schoolmarm could have thought the minister that even the hewers of wood and the drawers of water knew when to demand for wage increase to cushion their labour. She was the least possessed of that burning sense of mission to end the ogre of corruption the perennial crisis of fuel scarcity.

Over the weekend, the Governor of Central Bank of Nigeria, CBN, Mr Godwin Emefiele disclosed that Nigeria loses N24 billion yearly on waivers granted to importers of crude oil. This is in spite of the fact that those enjoying the waiver are the same people as those criminally benefiting from Fuel Subsidy graft.

Both the International Energy Agency and former U.S. Energy Information chief Guy Caruso predict oil prices are likely to remain lower for a while, barring a major disruption in supply. “It’s highly unlikely OPEC gets their act together, so I see prices being weak for the next six months or so,” Mr Caruso said.

It’s obvious that Nigeria will remain politically stunted, economically traumatised, developmentally backward for many years to come for refusing to diversify. It’s a stark choice we have to make. Either we diversify or we start drinking our oil! An anti-State agent? A megalomania? A sadistic fancy? All of them in part.  It’s because the State itself has become the biggest swindler and crook. A robbers’ state! The hope of nation-becoming, which early in 2011 vividly accomplished President Jonathan’s restoration’s campaigns has faded in the twilight of 2014.

There is no retelling that Mr Jonathan’s moribund regime represents the most harrowing of the nation’s nightmares over and beyond even the horror visited on the nation by military juntas. I am certain Nigeria will be approaching the polling boots across the country on February 14, 2015 with one thing in mind: Nations collapse or perish for whom it exists when the loss of force of resistance by the people give way to oppressive despots to triumph in their oppression.

Erasmus Ikhide,  @ErasmusIkhide