TheNewsGuru

Tag: OPEC

  • OPEC postpones 60th Anniversary to September

    OPEC postpones 60th Anniversary to September

    The Organisation of Petroleum Exporting Countries (OPEC) has postponed its 60th anniversary which had been planned to hold in the second half of May to September, 2021.

    OPEC made the disclosure in a letter on Wednesday by Ihsan Abdul Jabbar Ismaael, the Minister of Oil, Baghda-Iraq, the host country, which was sent to the Secretary General of OPEC, Dr Mohammed Barkindo.

    “I am writing to your Excellency regarding the 60th OPEC Anniversary which was planned to take place at Al-Shaab Hall in Baghdad, Iraq in the second half of May 2021.

    “Together, we are still facing the continued status of COVID-19 pandemic. The number of Coronavirus cases is climbing in Iraq and globally despite rolling out of vaccine.

    “Both vaccine hesitancy and its efficacy could pose serious concerns in near future. It is too early to say that the pandemic hit the peak and the cases have been heading to the end.

    “Large number of people is still vulnerable across the world which could lead to resort again to or extend quarantine and lockdowns to curb spread of coronavirus .

    “While we are eager that all Declaration of Cooperation (DoC) countries would attend this auspicious event in Baghdad next month, safety of the participants is our highest priority.

    “To this end, we regretfully have to postpone the celebration to the second half of September 2021, hoping by then that we will celebrate not only the OPEC’s 60th Anniversary but also the end of this Straining Pandemic.

    “We express our gratitude and appreciation for your understanding and support. It would be highly appreciated if this letter could be circulated to the esteemed head of delegation,” the letter said.

  • JUST IN: Oil price hits $71.28 per barrel

    JUST IN: Oil price hits $71.28 per barrel

    Oil price has risen to $71.28 per barrel in the international market, for the first time in the year 2021.

    This is coming on the heels of Thursday’s meeting where the Organisation of Petroleum Exporting Countries (OPEC) and other members resisted the pressure to increase production.

    Before Thursday’s meeting, Brent oil was up $1.28, or two per cent, to $63.98 a barrel by 1050 GMT on Wednesday.

    Norbert Rücker, an analyst at Swiss bank Julius Baer, on Wednesday, revealed that oil prices might push above $70 before mid-year.

    “We see oil prices pushing temporarily above $70 by mid-year,” he said.

  • NNPC restates commitment to OPEC+ agreement

    NNPC restates commitment to OPEC+ agreement

    The Nigerian National Petroleum Corporation (NNPC) has reiterated its commitment to abide by the output cut agreement of the Organization of the Petroleum Exporting Countries (OPEC) and its allies aimed at stabilizing the global oil market.

    The Group Managing Director of NNPC, Mallam Mele Kyari, stated this Wednesday while speaking at the ongoing virtual Gulf Intelligence “Global” UAE Energy Forum 2021.

    Mallam Kyari noted that despite the negative effects of the production cut on government revenue, it was the best step towards redeeming the value of hydrocarbon resources at the global market in the interest of all.

    Speaking on the topic, “Outlook for Africa/Nigeria’s Oil & Gas Sector in Post-Covid Era”, he said NNPC was hopeful that by the end of the year demand for crude oil would pick up and there would be a marginal increase in output, stressing that the Corporation was focusing more on gas, condensate and other revenue streams to tackle the revenue challenge arising from the OPEC+ production cut arrangement.

    He explained that gas proved to be a steady and reliable revenue stream during the height of the Covid-19 pandemic in 2020, adding that gas production and utilization would remain a key priority for the Corporation in 2021.
    Earlier in his presentation, the Minister of Energy & Agriculture, United Arab Emirates (UAE), H.E. Eng. Suhail Mohamed Al Mazrouei, appealed to all oil producing nations not to flood the market with crude oil.

    He said the UAE was at the moment more concerned about balancing the market forces of demand and supply in the global market than growing market share.

  • OPEC, non-OPEC countries to increase production by 0.5mb/d in January

    OPEC, non-OPEC countries to increase production by 0.5mb/d in January

    The Organisation of Petroleum Exporting Countries (OPEC) and the non-OPEC countries have agreed to increase crude oil production by 0.5 million barrels per day (mb/d) in January.

    The group reached the agreement at the 13th OPEC and non-OPEC Ministerial Meeting (ONOMM), held via videoconference, on Tuesday in Vienna.

    The meeting acknowledged the need to gradually return two mb/d to the market, with the pace being determined according to market conditions.

    It reconfirmed the decision made at the 12th ONOMM to increase production by 0.5 mb/d starting in January 2021, and adjusting production to 7.7 mb/d from 7.2 mb/d.

    The adjustments to the production level for February and March 2021 will be implemented as per the distribution detailed in a table.

    It noted that production adjustments for April and subsequent months would be decided during the monthly ONOMM following the criteria agreed upon in the 12th ONOMM.

    The meeting reiterated the need to continue closely monitoring market fundamentals, including non-DoC supply and its impact on the global oil balance and overall market stability.

    It further noted that high conformity levels had contributed significantly to market rebalancing and stability.

    “Between May and November, participating OPEC and non-OPEC countries contributed to reducing the global supply by approximately 1.9 billion barrels, including voluntary adjustments, and this has been key to the rebalancing of the market.

    “The meeting drew attention to the exceptional year of 2020 as an outlier that distorts the latest five-year average of OECD commercial oil stock levels.

    “It recommended retaining the 2015-2019 average as a more representative metric, while keeping the latest five-year average for the time being.

    “Furthermore, the meeting expressed appreciation to participating countries, particularly the United Arab Emirates (UAE) and Angola, which have performed beyond expectation.

    “At the same time, it reiterated the critical importance of adhering to full conformity, and compensating the overproduced volumes in accordance with the statements of the 11th and 12th ONOMM, in order to achieve the objective of market rebalancing and avoid undue delay in the process,’’ it said.

    The meeting requested all underperforming participating countries to submit their plans for implementation of the required compensation for the overproduced volumes to the OPEC Secretariat by Jan. 15, 2021.

    It welcomed Dr Mohammad Alfares, Kuwait’s new Minister of Oil and Minister of Electricity and Water, and expressed its appreciation to his predecessor, Dr Khaled A. Al-Fadhel, for his dedication to the DoC process.

    It further decided to hold the next Joint Ministerial Monitoring Committee (JMMC) Meeting on Feb. 3, 2021, followed by a JMMC Meeting on March 3, 2021 and ONOMM on March 4, 2021

  • Nigeria met only 19% OPEC+ cut compliance in May – Survey

    Nigeria met only 19% OPEC+ cut compliance in May – Survey

    Nigeria met only 19 percent of its promised reduction in line with the Organisation of the Petroleum Exporting Countries (OPEC) agreed cuts for the month of May 2020.

    OPEC oil output hit the lowest in two decades in May as Saudi Arabia and other members started to deliver a record supply cut. OPEC and its allies in April agreed to cut supply by a record 9.7 million bpd from May 1 in order to lift slump in demand and prices caused by the coronavirus crisis.

    In a survey carried out by Reuters over the weekend, it was discovered that Nigeria, alongside Iraq, did not fully comply with their share of the reduction.

    On average, the 13-member OPEC pumped 24.8 million barrels per day in the month of May, compared with 30.71 million barrels per day in April.

    In the month of May, they delivered 4.48 million barrels per day of the pledged reduction, equal to 74 percent compliance, the survey found.

    May’s output was the lowest by OPEC since 2002, excluding membership changes since then, the survey records show.

    Providing a breakdown, the biggest drop in supply came from Saudi Arabia, which pumped a record 11.7 million barrels in April. Saudi’s supply is expected to drop even further in June after it agreed to cut one million barrels per day

    The United Arab Emirates and Kuwait also cut back sharply, sources in the survey said. Both had also pumped at record rates in April.

    The sharp cuts in May, however, are watered down by the fact that several OPEC members, including Kuwait, the UAE, and Saudi Arabia, produced record-high volumes in April, which flooded the market in the face of a demand plunge.

    For May, Iraq reached just 38 percent compliance with its promised cuts, continuing a trend it also had in 2019.

    Venezuela and Iran reduced output in May, while Libyan supply was steady. All three were exempt from voluntary cuts because of US sanctions or internal issues limiting production.

    Iran is seeing a drop in fuel use because of the coronavirus outbreak, compounding the impact of sanctions on supply. Venezuela, contending with both US sanctions and a long-term decline in output, posted another drop in exports.

    Oil output in Libya has plunged since January 18 due to a blockade of ports and fields by groups loyal to eastern-based commander, Khalifa Haftar. Production averaged 100,000 barrels per day in May, the survey found.

  • Nigeria complies with OPEC+ deal, reduces crude oil production to 1.41mbpd

    After agreeing to a deal with the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, Nigeria is complying to reduce the volume of its crude production to 1.41 million barrels per day in May and June.

    The new output commenced on the first day of this month and it made Nigeria, which is Africa’s largest crude exporter and producer, to shove off about 23 percent or 417,000 barrels per day of its oil production daily for this month and the next.

    OPEC and others led by Russia agreed in April to a record output reduction of 9.7 million barrels per day for May and June as the coronavirus pandemic has slashed demand and crushed oil prices by as much as 50 percent.

    Nigeria, a signatory to this deal, is obliged to also take off its daily production quota so as to help rebalance the market, which faced its worst month in April, and affected revenue of the oil dependent economy.

    Last week, Minister of Minister of State for Petroleum, Mr Timipre Sylva, confirmed that the country was complying to the deal and would continue to do so.

    “The cut for Nigeria is about 417,000 barrels per day (bpd), which is about 23 percent of our production. And of course, as at the end of April, we have complied,” he said.

    Even despite improved prices to the commodity in the past two weeks, the Federal Executive Council (FEC) approved the downward review of the crude oil benchmark for the 2020 budget to $25 per barrel.

    In the initial 2020 budget signed by President Muhammadu Buhari last year, the benchmark was set at $57 per barrel, but the twin shocks of the coronavirus pandemic and an oil price war crashed oil prices earlier in March.

    This led the Federal Government to implement a new $30 per barrel benchmark, but with this new development, it may further experience decline in the country’s oil revenue, which contributes about 90 percent of the country’s exports, 30 percent of bank credits and 50 percent of fiscal revenues, putting the nation at risk.

  • Oil prices steady as OPEC, allies commence output cuts

    Oil prices continued pointing up for both benchmarks on Friday, May 1 as oil producers embark on record output cuts to tackle glut due to the coronavirus crisis.

    This led to the first weekly gain for the market in four weeks.

    The international benchmark, Brent crude, was up by 0.64 percent or 17 cents to $26.65 per barrel, while the American West Texas Intermediate (WTI) went up by 85 cents or 4.51 percent to sell at $19.69 per barrel.

    Friday marked the first effective day of the output ceiling deal signed by members of the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, known as OPEC+. Early last month, they agreed to reduce supply by 9.7 million barrels per day.

    The 23-country OPEC+ coalition agreed to cut the output by 9.7 million barrels per day for two months from an agreed baseline level starting May 1. These countries will also cut 7.7 million b/d between July and December and 5.8 million b/d from January 2021 to April 2022.

    TheNewsGuru.com (TNG) reports that Saudi Arabia and Kuwait had already commenced cutting back production before Friday.

    Norway also recently announced that it would cut oil production by 250,000 barrels per day in June – equating to 13 percent cut. Then after June, Norway is planning on easing those cuts to 138,000 barrels per day, for the remainder of the year.

    Although, due to the COVID-19 pandemic, oil demand will fall as much as 9.3 million barrels daily in 2020, there could be a swifter recovery if lockdowns ease quickly, as some countries have reopened their economies.

    It has been projected that a reduced lockdown period and a strong economic recovery in the second half of 2020 could limit the annual decline in oil demand to 6.5 million barrels per day or 6 percent from 2019 levels or 30 percent below its central forecast of 9.3 million barrels per day for the year.

    Countries like Spain, France, Austria and Switzerland among others have already removed COVID-19 restrictions and that’s going to see demand pick up, hence, the market swinging towards the positive.

    A lower-than-expected gain in US crude inventories was the other significant support factor on Friday for the futures.

    Data from the US Energy Information Administration (EIA) showed crude inventories rose by 9 million barrels last week to 527.6 million barrels, less than the 10.6 million-barrel rise analysts had forecast.

  • Nigeria announces new daily oil output after OPEC meeting

    Nigeria announces new daily oil output after OPEC meeting

    Nigeria is set to peg its daily oil output at 1.412 Million barrels per day from the average 1.87mbd.

    The production cut will take effect from May-June 2019.

    Petroleum Minister, Timipre Marlin Sylva said Nigeria is taking the shaving as a result of the 9.7m barrels output cut reached by OPEC+ on Sunday.

    The global cut which is graduated till 2022, will see oil producers reduce output by 8 million barrels between July and December 2020.

    From January 2021 till April 2022, output will be reduced by six million barrels.

    Nigeria is set to peg crude production in like manner.

    After the 1.412m output level in May-June, Nigeria will also peg output at 1.495 Million Barrels per day in July-September.

    Then from January 2021 till April 2022, output will go up to 1.579 Million Barrels per day.

    “This is in addition to condensate production of between 360-460 KBOPD of which are exempt from OPEC curtailment’, Sylva said.

    Nigeria joined its other OPEC+ counterparts on Easter Sunday to reach the production pegging decisions.

    “The intervention of the United States of America resulted in Mexico agreeing to a cut of 100 KBOPD and to be complemented by an additional 300 KBOPD by US Producers”, Sylva disclosed.

    “This will enable the rebalancing of the oil markets and the expected rebound of prices by $15 per barrel in the short term.

    “This also promises an appropriate balancing of Nigeria’s 2020 budget that has been rebased at $30 per barrel”, Sylva added.

  • Oil prices fall after OPEC, allies approve 10mbpd Production Cut

    Oil prices fall after OPEC, allies approve 10mbpd Production Cut

    Oil prices fell from an initial rise recorded on Thursday after major global oil producers agreed to put a ceiling on the volume of the commodity to produce per day.

    This agreement by oil producers was reached to counter the collapse in demand due to lockdowns around the world influenced by coronavirus.

    The Organisation of the Petroleum Exporting Countries (OPEC) and Russia and other producers known as OPEC+ were reported to have agreed to reduce to cut output by 10 million per day, ending an oil price war between Saudi and Russia, which had put further pressure on prices.

    However, the market reacted negatively to the news after details of the proposal, which as at press time had not been formally agreed by OPEC ministers, emerged.

    Brent crude, the global benchmark, dropped 89 cents or 2.28 percent to trade at $32.09 per barrel. As for the US benchmark, the West Texas Intermediate (WTI), it fell by $1.57 or 6.26 percent to $23.51 per barrel.

    Oil prices had been pointing up in the morning ahead of the meeting but they turned negative as traders awaited confirmation of the cut, including how it would be divided among the OPEC++ members as well as the production numbers on which the cut would be based.

    Even when this was revealed, the market did not surge as expected. It was disclosed that Saudi Arabia and Russia, the two biggest producers in the deal, agreed between them to cut about 5 million per day, while other producers agreed to remove an additional 5 million barrels.

    The cartel also called on the US and Canada, among other countries, to cut another 5 million barrels per day when G20 energy ministers hold an extraordinary meeting on Friday, April 10.

    The cut of 10 million barrels per day of oil production will last for two months- May and June, but the unexpected hand of the market did not move in favour as it had hoped for a larger cut as reports before the meeting had suggested that Saudi Arabia and Russia were discussing cuts that could take a record 20 million barrels per day of global production offline.

    Before Thursday, the market had been watching for cuts in the 10 million to 15 million barrels per day range after President Donald Trump said he had spoken to Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman and expected them to announce a deal of that size.

    If oil prices don’t let on, it will mean more problem for the market facing a large demand drop due to the coronavirus spread, but the market might take a turn when the full details of the final deal, expected to be announced after the G20 meeting on Friday.

  • OPEC summons Nigeria, Other member countries for Emergency Meeting

    The Organisation of Petroleum Exporting Countries and its allies known as OPEC+ has called for an emergency virtual meeting to hold on Monday, April 6, 2020.

    This followed intervention of the United States President, Mr Donald Trump, in the spat between Saudi Arabia and Russia on Thursday.

    Prices of crude oil began to rise yesterday after Mr Trump tweeted about this, giving hopes of better days ahead for the commodity, which has been terribly hit by low demand caused by Coronovirus outbreak in the world.

    The United States extended a production cut to Saudi Arabia and others to support price of crude oil at the global market.

    Next Monday’s meeting, which will be held virtually, would be used to discuss the newly proposed output cut among oil producers, including non-members of OPEC.

    The details of those who will attend haven’t been confirmed yet. However, there are speculations that the United States, a driving force behind the emergency meeting, may likely be part of the talks.

    Some oil producing counties have made their intentions known to cut production so as to keep the price high at the market.

    On the part of Saudi Arabia, it has said it’s interested only if others, including the U.S. share in the production cut to be discussed at the meeting. This hints that it wants more than just the OPEC+ coalition, which would include America, Canada, Brazil and some other non-OPEC producers.

    Yesterday, the market was met with an unexpected news when the Mr Trump made a Twitter post that he was expecting Russia and Saudi Arabia to cut output up to 15 million barrels, which analysts doubt would help the oversupply problem the market is facing.

    Although late on Thursday, a source from Russia was reported to have denied that any agreement has been reached, but the news didn’t dent the surge recorded as prices climbed up to 25 percent.

    Many, however, think a deal might be in the offing because the price war has really affected the economy of many producers, who in addition to facing demand problems, were finding it difficult to sell their crude grades.

    Nigeria, among others, is expected to attend the meeting on Monday and any agreement reached could help bring output back to where they were before the oil price war was declared by Saudi Arabia, although there have been doubts that only one of the major problems will be solved as demand will still be low because of the pandemic.

    As at press time, the oil market has responded well to this news as the Brent Crude was up by 4.34 percent or $1.30 to $31.32 per barrel and the US crude, West Texas Intermediate (WTI), up by 1.07 percent or 27 cents to $25.70 per barrel.