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Tag: OPEC

  • Oversupply: OPEC reduces Nigeria’s oil production quota to 1.68mbpd

    Oversupply: OPEC reduces Nigeria’s oil production quota to 1.68mbpd

    …effective from January

    Nigeria is expected to cut its crude oil production by 3.04 per cent to 1.685 million barrels per day for the first half of next year, as part of efforts by the Organisation of Petroleum Exporting Countries (OPEC) to reduce oversupply.

    OPEC and 10 non-OPEC countries agreed earlier this month to cut oil production by 1.2 million bpd effective from January for an initial period of six months to shore up what many expect to be weakening market fundamentals ahead.

    Nigeria, which was exempted from the previous cuts since January 2017, was asked to join the deal during the OPEC meeting on December 7 in Vienna.

    With a reference level of 1.738 million bpd, Nigeria’s oil production is to be cut by 53,000 barrels to arrive at the new quota of 1.685 million bpd, according to a breakdown of member quotas under OPEC’s supply accord obtained by S&P Global Platts on Thursday.

    OPEC kingpin, Saudi Arabia, has pledged to lower its crude oil output to 10.311 million bpd -a 322,000 bpd cut from its October level, the document prepared by OPEC’s secretariat showed.

    The document showed that OPEC would shoulder 812,000 bpd of those cuts, while the non-OPEC participants would cut 383,000 bpd.

    Iraq, OPEC’s second highest producer, will cut 141,000 bpd to reach an output level of 4.512 million bpd and the UAE will cut 96,000 bpd to average 3.072 million bpd.

    Iran, Libya and Venezuela are exempted from the cuts.

    The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said on December 7, that it was very difficult for Nigeria to reduce its crude oil production.

    Kachikwu, who spoke on ‘Bloomberg Daybreak: Europe’ ahead of the OPEC meeting in Vienna, stated that there was a need for an extension of production cuts to stabilise the global oil market.

    Asked if Nigeria would be able to reduce production, he said, “It is very difficult to do that but where we are now, everybody must be seen to contribute. Obviously, the smaller it is, the more amenable we are to participate; the larger it is, the more we will struggle to participate.

    “We have got exemption three times understandably. This time round, I think there is a decision that everybody should be seen to chip in.”

    The 2019 budget proposal presented on Wednesday to the National Assembly by President Muhammadu Buhari proposed an oil production of 2.3 million barrels per day.

    “Production of 2.3 million bpd projection for 2019 may not be realistic owing to OPEC’s plan to cut production in order to shore up prices,” the Chairman, Petroleum and Technology Association of Nigeria, Mr Bank-Anthony Okoroafor, told our correspondent on Thursday.

    According to him, the benchmark price of $60 per barrel used for the budget is not smart, based on all the uncertainties and volatility surrounding the price of oil.

     

  • OPEC output rises on Nigeria, Kuwait supplies

    OPEC output rises on Nigeria, Kuwait supplies

    Oil production from the Organisation of Petroleum Exporting Countries (OPEC) rose in July, despite supply shortfalls from Libya, Iran and Saudi Arabia. Rising output from Nigeria, Kuwait and the UAE offset the drops.

    OPEC production averaged 32.32 million barrels per day (bpd) in July, 40,700 higher than June, according to the group’s monthly oil market report, based on secondary source figures.

    Production from Nigeria, Kuwait and the UAE offset the drops elsewhere. Kuwait ramped up its output by 78,500 to 2.8 million bpd last month, Nigeria by 70,500 to 1.67 million bpd, and the UAE by 69,200 to 2.96 million bpd.

    Meanwhile, production fell by 57,000 to 600,000 bpd in Libya, by 53,000 to 10.39 million bpd in Saudi Arabia, with output from Venezuela dropping by 48,000 to 1.28 million bpd, according to OPEC.

    As for Saudi Arabia, OPEC’s largest oil producer submitted to the group its own data which showed that output slipped by 200,000 to 10.28 million bpd in July.

    In addition, OPEC reduced its projection for global oil demand growth for this year by 20,000 to 1.64 million bpd, while lowering the forecast for the next year by 20,000 to 1.43 million bpd. This was attributed to a weaker-than-expected demand in Latin America and the Middle East during the second quarter of the year.

    However, OPEC ran out the prospect that trade spat between the US and China to have much impact on the world’s oil demand, unless the rifts reach beyond the world’s largest two economies.

    The group also raised its forecasts for supply from rival producers for the rest of the year, predicting that non-OPEC output would total 59.62 million bpd in 2018, 2.08 million bpd increase from the prior year.

    Moreover, demand for OPEC crude is set to reach 32.9 million bpd this year, dropping by 600,000 bpd from the previous year.

  • Oil prices steady after shake-out on supply worries

    Oil prices steadied on Wednesday after slipping prices on concerns that Saudi Arabia and Russia will pump more crude in response to falling global crude inventories and rising consumer prices.

    Saudi Arabia and Russia have discussed raising OPEC and non-OPEC oil production by one million barrels per day (bpd) to counter potential supply shortfalls from Venezuela and Iran.

    Brent crude was up one cent at 75.40 dollars a barrel by 0619 GMT.

    U.S. West Texas Intermediate crude was up 10 cents, at 66.83 dollars a barrel.

    “OPEC has over-delivered on supply cuts in the past six months,” Harry Tchilinguirian, global head of commodity market strategy at French bank BNP Paribas, said in a note to clients.

    “There is … scope for an increase in OPEC output.”

    OPEC-led supply curbs have largely cleared an inventory surplus in industrialized countries, and stocks continue to decline.

    The Organisation of the Petroleum Exporting Countries is due to meet in Vienna on June 22.

    Credit Suisse analysts on Tuesday said even if Russia and OPEC producers raise output, they would likely only add an additional 500,000 bpd.

    The move would leave inventories in the most developed countries short of the five-year average by the end of 2018.

    Falling share prices and a stronger U.S. dollar index also weighed on oil prices.

    A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.

     

  • NNPC appoints Mallam Mele Kyari OPEC national representative

    NNPC appoints Mallam Mele Kyari OPEC national representative

    The Nigerian National Petroleum Corporation (NNPC) has announced the appointment of Mallam Mele Kyari, incumbent Group General Manager in charge of its Crude Oil Marketing Division, as Nigeria’s National Representative to the Organization of the Petroleum Exporting Countries (OPEC).

    The NNPC in a statement by its Group General Manager, Group Public Affairs Division, Ndu Ughamadu, said the appointment was made by Nigeria’s Head of Delegation to the OPEC Conference and the Honourable Minister of State for Petroleum Resources and Board Chairman of NNPC, Dr. Emmanuel Ibe Kachikwu.

    It noted that the position requires Mallam Kyari to lead Nigeria’s team to the OPEC Economic Commission Board (ECB) which precedes the bi-annual meetings of the OPEC Ministerial conference.

    TheNewsGuru reports the ECB reviews the global oil markets and makes input from the perspectives of the individual member countries.

    The corporation further explained that Mallam Kyari may also be required to provide any support to the Honourable Minister of State for Petroleum Resources and the OPEC Governor in the performance of Nigeria’s roles and participation in OPEC matters.

    A geologist, Mallam Kyari is a quintessential crude oil marketer with prerequisite certification and outfield pedigree in petroleum economics and crude oil and gas trading.

    Within the last 26 years he has traversed the entire value chain of the petroleum industry posting resounding performance in all his assignments and duty posts.

    Under his watch, the Crude Oil Marketing Division has recorded noticeable transformation in the management and sales of the various Nigeria’s crude oil grades via an infusion of transparency and automation of the processes.

     

  • NNPC boosts gas supply to power sector by 88.89%

    NNPC boosts gas supply to power sector by 88.89%

    The Nigerian National Petroleum Corporation (NNPC) increased the supply of gas to the power sector by 88.89 per cent between January 2017 and January 2018.

    A press statement by the NNPC Spokesman, Mr Ndu Ughamadu, in Abuja on Sunday, said the information was reported in the corporation’s monthly Financial and Operations report for January 2018.

    Ughamadu quoted the monthly report as saying that gas-to-power supply as at January 2018 stood at 731 million metric standard cubic feet (mmscf) per day as against 387mmscf/d in January 2017.

    “An average of 731mmscf/d of gas was sent to over 20 domestic thermal power plants in the month of January 2018.

    “This generated a thermal power output of 3,076 megawatts (mw) to the national grid, representing 76.7 per cent of the total national power generation,” he said.

    According to him, an additional 365mmscf/d of gas was supplied to the industrial sector to power over 50 companies in the period under review to boost the nation’s economy.

    “The total gas production for the month was put at 8,169mmscf/d out of which 14 per cent was supplied to the domestic market, 43 per cent for export, while 31 per cent was re-injected and the balance flared.

    “The 30th edition of the monthly Financial and Operations report gave the total crude processed by the local refineries (Kaduna Refining and Petrochemical Company (KRPC) and Port Harcourt Refining Company (PHRC)] for the month of January 2018 as 204,877MT.

    “KRPC accounted for 183,022MT while a total of 21,855MT was processed by KRPC,” said the report.

    It stated that production by the two refineries during the period translated into a combined yield efficiency of 89.97 per cent as against the 88.99 per cent in December 2017.

    The report said in the month under review, 1,463.66million litres of PMS and 33.79million litres of DPK were supplied into the country through the Direct Supply Direct Purchase arrangements.

    “The corporation’s supply of PMS into the country during the period was far above the normal daily supply of 35 million litres per day to ensure products availability nationwide.

    “The report reiterated that NNPC was inching closer to choosing financiers for its refineries with a view to achieving a 90 per cent capacity utilisation per stream day before the end of 2019,” continue the report.

    The report listed crude oil pipeline vandalism among the biggest challenges that plagued the downstream operations of the corporation in January 2018, which put the corporation at disadvantaged position.

    It said during the period under review, 194 pipeline points were vandalised, with PHC-ABA and ABA-Enugu pipeline segments of the network accounting for 187 points or 86.57 per cent of the affected pipeline.

    The report gave the average international Brent crude price for January 2018 as 69.08 dollars per barrel as against 64.37 per barrel in December 2017.

    The report said that over the last 12 months the crude oil price had risen by about 26.57 per cent.

    It stated that the continuing efforts of OPEC and non-OPEC producers to stabilise the market as well as improving oil demand and other measures were responsible for the stability in the price of oil.

     

  • Supply cuts,strong demand, pushes oil price close to late-2014 highs

    Oil prices held firm on Friday near three-year highs reached earlier this week as ongoing OPEC-led supply cuts, as well as strong demand, gradually draw down excess supplies.

    Brent crude oil futures were up at 73.79 dollars per barrel at 0440 GMT.

    U.S. West Texas Intermediate (WTI) crude futures down 2 cents at 68.40 dollars a barrel.

    Both Brent and WTI hit their highest levels since November 2014 on Thursday, at 74.75 and 69.56 dollars per barrel respectively. WTI is set for its second weekly gain.

    Oil prices have been pushed up by a gradually tightening market.

    Led by top exporter Saudi Arabia, the Organization of Petroleum Exporting Countries (OPEC), has been withholding production since 2017 to draw down a global supply overhang.

    The tighter oil market is feeding into refined products.

    Oil supply tightness is also a result of healthy oil demand.

    Beyond OPEC’s supply management, crude prices have also been supported by an expectation that the United States will re-introduce sanctions on OPEC-member Iran.

     

  • Oil prices rise to $70 on strong economy amid OPEC cuts

    Oil prices were firm on Wednesday, receiving ongoing support from healthy economic growth as well as from supply restrictions led by a group of producers around the Organisation of the Petroleum Exporting Countries (OPEC) and Russia.

    Spot Brent crude oil futures, the international benchmark for oil prices, were at 70 dollars a barrel at 0102 GMT, up 4 cents from their last close.

    U.S. West Texas Intermediate (WTI) crude futures were at 64.59 dollars a barrel, up 12 cents .

    In the latest sign of healthy global economic growth, Japanese manufacturing activity expanded at the fastest pace in almost four years in January, a survey showed on Wednesday.

    Economic growth is translating into healthy oil demand growth, which comes at a time that OPEC and Russia lead production cuts aimed at tightening the market and propping up prices.

    The deal to withhold output started in January last year and is currently set to last through 2018.

    Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore said a “beaming economic forecast along with stout compliance from OPEC (to withhold production) is providing convincing support.”

    In spite of the overall supportive market conditions, which have seen crude futures rally by almost 15 percent since early December, there are signs that traders are preparing for a downward correction.

    One way of doing that is to take out so-called put options on crude futures contracts which give a trader the right, but not the obligation, to sell at a certain price.

     

  • Oil production: OPEC may impose ‘soft target’ on Nigeria, Libya – Kachikwu

    Oil production: OPEC may impose ‘soft target’ on Nigeria, Libya – Kachikwu

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu said the Organisation of Petroleum Exporting Countries (OPEC) may impose some kind of “soft” targets on Nigeria and Libya on the basis of their average production this year.

    He was quoted by Financial Times as saying on the sidelines of the ongoing OPEC meeting in Vienna, Austria that OPEC was discussing “soft targets” of around 1.8 million bpd for Nigeria and 1 million bpd for Libya, and talks continued on how to phrase those numbers as “indicative” and not include them as hard targets in the final OPEC statement.

    Iran’s Oil Minister Bijan Zanganeh said OPEC is bringing Libya and Nigeria- the exempt members – into the fold with contributions to the efforts to erase the oversupply. He said the two African producers had agreed to cap their production at a collective level of less than 2.8 million bpd.

    A delegate told Reuters that OPEC talks ended in Vienna with an agreement to extend the production cut deal through the end of 2018.

    Going into the meeting, OPEC was expected to review the production numbers and targets of Libya and Nigeria, but, according to sources and analysts, it was uncertain whether the cartel would impose quotas or caps on the two African producers due to the still-tentative recovery and possible return of sudden outages due to militancy.

    Still, some kind of ‘loose’ or ‘soft’ targets were being aired as a possible outcome.

    Even though Libya and Nigeria have higher production targets than the recent highs of their production at 1 million bpd and 1.8 million bpd, they face security, technical, and financial constraints in growing production much higher.

    Still, the fact that the two African countries agreed to cap at recent highs, not at the higher production targets, is a significant sign that they have been asked or persuaded to contribute to the deal, at least in some form.

    OPEC and its partners, including Russia, agreed to extend oil-production cuts to the end of 2018 and included Libya and Nigeria in the deal for the first time.

    Iraq’s Oil Minister Jabbar Al-Luaibi confirmed the decision after a day of talks that reflected a rare consensus between members of the Organisation of Petroleum Exporting Countries and its allies. All agreed that the market is moving in the right direction, but is not yet balanced.

    After some initial hesitation, Russia supported the accord that will result in nations accounting for more than half the world’s oil supply restraining output for two years.

    Russia had previously sought assurances on how and when the agreement would be phased out, people involved in negotiations said earlier this week. The country needs greater clarity than most OPEC members because its economic policy making is more complex, including a floating exchange rate that fluctuates with the oil price.

    It will be premature to talk about an exit strategy because OPEC and its allies are relying on oil demand in the third quarter of 2018 to finally eliminate the inventory surplus, Saudi Oil Minister Khalid Al-Falih said before the meeting. But the kingdom is open to discussions about how the group could wind down the cuts “very gradually” once its goals are achieved, he said.

    OPEC ministers didn’t have a detailed discussion about the mechanism that will be used to review the deal in June, Zanganeh told reporters. He also said Nigeria and Libya had agreed to a collective output cap of 2.8 million barrels a day. Nigeria pumped 1.73 million barrels a day in October and Libya 980,000 a day, according to data compiled by Bloomberg.

     

  • Oil markets firm on expected extension of production cuts

    Oil markets firm on expected extension of production cuts

    Oil markets were firm on Monday, with Brent crude opening above 60 dollars per barrel on expectations an OPEC-led production cut due to expire next March would be extended.

    Brent crude oil futures, the international benchmark for oil prices, were at 60.63 dollars per barrel at 0018 GMT, up 19 cents or 0.3 per cent from their last settlement.

    That’s close to their highest level since July 2015 and up more than 36 per cent since their 2017 lows last June.

    U.S. West Texas Intermediate (WTI) crude futures were up by 16 cents, or 0.3 per cent, at 54.06 dollars a barrel.

    “With strong compliance to OPEC’s production curbs already supporting prices, comments from the Saudi Arabian Crown Prince that suggested the production cut agreement should be extended added to gains,” ANZ bank said on Monday.

    The Organisation of the Petroleum Exporting Countries (OPEC) plus Russia and nine other producers have agreed to hold back about 1.8 million barrels per day (bpd) to get rid of a supply glut.

    The pact runs to March 2018, but Saudi Arabia and Russia, who are leading the effort, have both voiced their support to extend the agreement.

    OPEC is scheduled to meet officially at its headquarters in Vienna, Austria, on Nov. 30.

    The confident sentiment is visible in the way financial traders have positioned themselves.

    Hedge funds and other money managers raised their bullish wagers on U.S. crude futures and options in the week to October 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

    The speculator group raised its combined futures and options position in New York and London by 15,041 contracts to 280,634 during the period.

     

     

    Reuters/NAN

  • OPEC exempts Nigeria from oil production cut

    OPEC exempts Nigeria from oil production cut

    The Organisation of Petroleum Exporting Countries (OPEC) and Non-OPEC countries have approved Nigeria’s exemption from oil production cuts.

    A statement by the Director, Press Relations, Ministry of Petroleum Resources, Mr Idang Alibi, said the endorsement was given by at a meeting of OPEC’s Joint Ministerial Monitoring Committee on Friday in Vienna.

    Nigeria was first granted production cuts at the November, 2016 Ministerial Conference and this was later extended in May at another Ministerial Conference, until the country stabilizes its crude oil production.

    Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said though Nigeria’s production recovery efforts had made some appreciable progress from October, 2016, it was not yet ”out of the woods”.

    The statement quoted Kachikwu, who was at the Vienna meeting, as saying that though Nigeria hit 1.8 million barrels production per day in August, it was not enough justification for call by some countries for Nigeria “to be brought into the fold”.

    ”Nigeria as one of the older members of OPEC will continue to work for the good of the organisation and its member countries, respecting whatever agreements and resolutions are collectively made.

    ”Nigeria will be prepared to cap its crude production when it has stabilized at 1.8 million barrels per day,” he said.

    The meeting noted that overall compliance by OPEC and Non-OPEC participating countries to the Agreement on oil production cut for August was 116 per cent, the highest since the agreement in January, 2017.

    It said that the objectives of the accord were steadily being achieved with the gradual draw-down of inventories by nearly 50 per cent since the agreement came into effect.

     

     

    NAN