Posts Tagged ‘oil prices’

Saudi Arabia to Target U.S. With Sharp Oil Export Cut, Sources Say

December 13, 2018

After flooding the U.S. market in recent months, Saudi Arabia plans to slash exports to the world’s largest oil market in the coming weeks in an effort to dampen visible build-ups in crude inventories.

American-based oil refiners have been told to expect much lower shipments from the kingdom in January than in recent months following the OPEC agreement to reduce production, according to people briefed on the plans of state oil company Saudi Aramco.

Image result for muhammad bin salman, pictures

Saudi crude shipments to the U.S. next month could even test the 30-year low set in late 2017 of 582,000 barrels a day, down about 40 percent from the most recent three-month average, the same people said, asking not to be named as the information isn’t public. The final figure could still change, they added.

By shifting the focus of Saudi export reductions toward the U.S., Riyadh hopes to show to the market it’s making good on its promise to cut supplies. Fluctuations in U.S. crude imports and stockpiles have an outsize impact on the market because data are available on a weekly basis. In other regions, oil traders only get official figures on a monthly basis, or not at all in the case of stockpiles in big consumers such as China and India.

The Saudi energy ministry didn’t respond to a request for comment.

While the plan to slash Saudi exports to America may ultimately convince a skeptical oil market about the kingdom’s resolution to bring supply and demand in line, it may anger U.S. President Donald Trump, who has used social media to ask the Saudis and OPEC to keep the taps open.

Donald J. Trump

@realDonaldTrump

Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!

31.9K people are talking about this

Saudi total exports are set to drop to around 7 million barrels a day in January, down from about 8 million barrels a day in November-December, one of the people said. Khalid Al-Falih, the kingdom’s energy minister, told reporters last week that Saudi production will drop in January to 10.2 million barrels a day, down from 11.1 million barrels a day in November.

The oil market has so far largely ignored the production cuts that OPEC and its allies announced in early December, a larger-than-expected 1.2 million barrels a day — or just over 1 percent of global demand. Despite the OPEC+ curbs, benchmark Brent crude has hovered near $60 a barrel. Futures in London jumped 2.2 percent Thursday on the prospect of lower Saudi shipments to the U.S., closing at $61.45. Prices are still down 7.7 percent for the year.

The export curbs, if fully implemented, will affect big U.S. refiners such as Valero Energy Corp., Phillips 66, Chevron Corp., Exxon Mobil Corp., and Marathon Petroleum Corp. forcing them to buy similar crude elsewhere, such as Mexico, Canada or Venezuela. They could also hit Motiva Enterprises LLC, the Saudi-owned company that operates the largest refinery in the U.S.

Saudi Arabia has shipped 860,000 barrels a day of crude to the U.S. on average so far this year, according to Bloomberg calculations based on weekly customs data. Saudi exports into America had run even higher in the second half of the year, with July-to-December shipments rising to an average of 975,000 barrels a day, according to Bloomberg calculations.

Inventories Scrutinized

Oil trader Andy Hall, who earned the nickname “God” for his prescient calls on pricing before closing his hedge fund after suffering losses last year, says the oil market is heavily influenced by data like the weekly U.S. stockpile figures.

“People look at these things, scrutinize them,” he said of the data on Bloomberg Television Thursday. “The fact is, they only cover the U.S., which is 25 percent of the world oil market. The data available for inventories elsewhere in the world is poor at best.”

Hall now serves on the advisory board of Orbital Insight, a Palo Alto-based provider of analytic platforms to translate satellite and aerial images into useful data, including global oil supplies.

https://www.bloomberg.com/

https://www.bloomberg.com/news/articles/2018-12-13/saudi-arabia-is-said-to-target-u-s-with-sharp-oil-export-cut

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Asian markets struggle, pound wallows at 20-month low

December 11, 2018

Asian equities struggled again Tuesday despite a bounce in New York as investors fret over a perfect storm of issues that have hammered global markets, while the pound remained stuck around 20-month lows on Brexit uncertainty.

Bargain-buyers tried to step in after the latest sell-off but were unable to gain traction, with fears about the outlook for the global economy keeping sentiment beaten down.

The China-US trade row, signs of softness in both countries’ economies, the Huawei arrest, Brexit, demonstrations in France and tanking oil prices are among the problems facing investors, and analysts warned of more volatility to come.

Image result for china, stock market, pictures

Adding to those problems is upheaval in India — another crucial economy — where the head of the central bank has resigned following a row with Prime Minister Narendra Modi’s administration over alleged government interference.

Monday’s development hammered the rupee, which was already Asia’s worst-performing currency, and battered the Sensex stock market. Futures point to another sell-off when they reopen later in the day.

Global risk sentiment “is facing a towering wall of worry as virtually every major economy in the world is slowing, suggesting the synchronised global slowdown is accelerating at a much faster pace than thought,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

In early Asian trade Hong Kong was down 0.1 percent and Tokyo ended the morning 0.6 percent lower, with Singapore 0.2 percent off.

However, Shanghai, Sydney and Wellington each edged 0.2 percent higher, while Seoul gained 0.1 percent and Manila put on one percent.

– ‘Positive signal’ –

On currency markets the pound was stuck around levels last seen in April 2017, having dived 1.6 percent Monday in reaction to Prime Minister Theresa May’s decision to delay Tuesday’s parliamentary vote on her Brexit deal.

May recognised the agreement would be voted down and promised to get clarity from Brussels on the key issue of Northern Ireland, but the decision ramped up uncertainty and fuelled fresh questions about her political future.

Adding to the problems, the PM did not provide a timetable for a new vote.

“The market is concerned that the postponement uses up valuable time before the 29th March exit date, and the risk of a no-deal scenario is growing” said National Australia Bank economist David de Garis.

On an upbeat note, Beijing’s economics point man Vice Premier Liu He spoke with US officials to flesh out a timetable for talks to resolve their trade row, following this month’s G20 truce hammered out between Donald Trump and Xi Jinping.

“It’s a positive signal that work is in progress,” said Michelle Lam, a greater China economist at Societe Generale.

However, there are low expectations the two sides can reach a full-blown agreement that will end their trade war, with the waters muddied by the arrest of a top executive at Chinese telecoms giant Huawei.

Meng Wanzhou, Huawei’s chief financial officer and daughter of the firm’s founder, faces US fraud charges related to allegedly breaking Iran sanctions but has asked for bail.

The arrest has angered China and led to concerns it could derail the trade talks.

Both main oil contracts inched higher but were well short of making up for the three percent losses suffered Monday on concerns an output cut agreed by OPEC at the weekend might not be enough to lift process and offset a supply glut.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.6 percent at 21,100.30 (break)

Hong Kong – Hang Seng: DOWN 0.1 percent at 25,716.45

Shanghai – Composite: UP 0.2 percent at 2,590.41

Pound/dollar: UP at $1.2568 from $1.2562 at 2200 GMT

Euro/dollar: UP at $1.1360 from $1.1354

Dollar/yen: DOWN at 113.10 yen from 113.35 yen

Oil – West Texas Intermediate UP 18 cents at $51.18 per barrel

Oil – Brent Crude: UP 24 cents at $60.21 per barrel

New York – Dow Jones: UP 0.1 percent at 24,423.26 (close)

London – FTSE 100: DOWN 0.8 percent at 6,721.54 (close)

Oil rallies after Opec agrees to cut output by 1.2m barrels a day

December 7, 2018

Brent crude jumps 5 per cent on news of pact

By David Sheppard in Vienna

Oil prices jumped 5 per cent as Opec broadly agreed a deal to cut oil production by 1.2m barrels a day.

One Opec delegate said the pact between cartel members had been reached for a combined cut with allies outside the group led by Russia. Iran has been granted an exemption from the cuts as it is under sanctions from the US, the delegate said. Brent was recently up 5 per cent to $63 a barrel.

More to come….

https://www.ft.com/content/490597a8-fa28-11e8-8b7c-6fa24bd5409c

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Oil dives after OPEC delays output decision

Saudi Arabia’s Energy Minister Khalid Al-Falih, left, at the OPEC conference in Vienna, Austria. (AFP)
Updated 07 December 2018
  • OPEC met in Vienna to decide production policy in coordination with other countries including Russia, Oman and Kazakhstan
  • An OPEC delegate said the organization had agreed on a tentative deal to cut oil output but had not come up with a final figure

NEW YORK: Oil prices fell in choppy trading on Thursday after OPEC and allied exporting countries ended a meeting without announcing a decision to cut crude output, and prepared to debate the matter on Friday.

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The Organization of the Petroleum Exporting Countries (OPEC) met in Vienna to decide production policy in coordination with other countries including Russia, Oman and Kazakhstan.
An OPEC delegate said the organization had agreed on a tentative deal to cut oil output but had not come up with a final figure.

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Earlier, Saudi Energy Minister Khalid Al-Falih said OPEC needed Russia to cooperate, and said a decision was likely by Friday evening.

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“If everybody is not willing to join and contribute equally, we will wait until they are,” Al-Falih said.

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Market watchers had expected a joint cut of 1 million to 1.4 million barrels per day (bpd).

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Brent crude futures were down $2.57, or 4.2 percent, on the day to $58.99 a barrel by 4:41 p.m. GMT, off the session low of $58.36. US crude futures fell $2.37, or 4.5 percent, to $50.52 a barrel, bouncing off the session low of $50.08 a barrel.

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The crude benchmarks have slumped about 30 percent this quarter.

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Prices found support briefly after data showed US crude stockpiles declined last week for the first time in 11 weeks. The US became a net exporter of crude and refined products for the first time since at least 1991, data from the US Energy Information Administration showed.

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“Fears of a further escalation in the US-China trade war, and potential for OPEC+ not cutting oil production deep enough will continue to weigh on oil prices in today’s trading session,” said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

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“All eyes are now fixated on (an) OPEC+ joint declaration, and a combined output cut of at least 1 million barrels per day will be required to see a meaningful recovery in oil prices.”

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Led by Saudi Arabia, OPEC’s crude oil production has risen by 4.1 percent since mid-2018, to 33.31 million bpd.

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European equities hit their lowest in two years and commodity-sensitive currencies such as the Russian rouble fell sharply, in part because of the slide in the oil price, but also with the arrest of a top executive of Chinese tech giant Huawei in Canada for extradition to the US. The arrest came just as Washington and Beijing prepare for crucial trade negotiations.

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Barclays said in its Global Outlook published on Thursday that “investors need to lower their expectations” and “2019 should be a period of lower returns and higher volatility.”

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Barclays said it expected “the global economy to slow over the next several quarters” although it added that “not one major economy is near recession.”

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US crude inventories have climbed steadily as domestic production surged to new peaks. Exports of US crude also jumped to a record 3.2 million barrels per day last week, adding to global supplies. Stockpiles at Cushing, Oklahoma, the delivery point for US crude futures, rose to the highest in nearly a year.

Reuters

OPEC yet to agree on final deal as Iran seeks exemptions

December 7, 2018

Saudi Arabia’s energy minister said he wasn’t confident OPEC would reach a deal on Friday to cut oil output as sources said the producer group’s leader had yet to agree on exemptions for sanctions-hit Iran.

Image result for iran, oil, flag, pictures

The Organization of the Petroleum Exporting Countries resumed discussions in Vienna at around 0900 GMT, before a meeting later in the day with non-OPEC oil producers led by Russia.

On Thursday, OPEC tentatively agreed an oil output cut but could not decide concrete parameters for reductions as it was waiting for a commitment from non-OPEC heavyweight Russia, sources from the group said.

On Friday, two OPEC sources said Saudi Arabia’s arch-rival Iran, which came under fresh U.S. sanctions in November, was also holding up a final deal.

“Iran will insist on an exception until sanctions are removed,” one of the OPEC sources said.

Saudi Arabia faces pressure from U.S. President Donald Trump to help the global economy by refraining from cutting supplies.

And with Trump seeking to squeeze Tehran with sanctions, an OPEC output cut would provide additional support to Iran by increasing the price of oil.

Saudi Energy Minister Khalid al-Falih, asked on Friday whether he was confident the day’s meetings would produce a deal, said: “No.”

OPEC’s battle to coax Russia to cut oil output as the US ramps up: tmsnrt.rs/2RzCE3J

Difference in OPEC oil output between Nov 2018 and Oct 2016: tmsnrt.rs/2RqgBMS

Possibly further complicating any OPEC decision is the crisis around the killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many U.S. politicians to impose stiff sanctions on Riyadh.

U.S. special representative for Iran Brian Hook met Falih in Vienna this week, in an unprecedented development ahead of an OPEC meeting. Saudi Arabia first denied the Hook-Falih discussion took place but later confirmed it.

“U.S. political pressure is clearly a dominant factor at this OPEC meeting, limiting the scope of Saudi actions to rebalance the market,” said Gary Ross, chief executive of Black Gold Investors and a veteran OPEC watcher.

(Graphic: Who might agree to an OPEC crude supply deal? – tmsnrt.rs/2Ru61od)

RUSSIAN DILEMMA

The price of crude LCOc1 has fallen almost a third since October to below $60 a barrel as Saudi Arabia, Russia and the United Arab Emirates raised output to offset lower exports from Iran, OPEC’s third-largest producer.

The price decline prompted OPEC and its allies to discuss output cuts, and Falih said on Thursday possible reductions by those involved ranged from 0.5-1.5 million bpd.

Oil producers’ budget-balancing act: tmsnrt.rs/2QfNS0J

“The Iran exemption is the biggest hurdle … If there is no agreement, the timeline for a deal will be pushed to the first quarter of 2019,” Energy Aspects said in a note.

A reduction of 1 million bpd would be acceptable and so far was the main scenario, Falih said, but he added that Russia needed to commit significant volumes.

Russian Energy Minister Alexander Novak met with President Vladimir Putin in St Petersburg on Thursday and returned to the Austrian capital on Friday morning.

OPEC delegates have said the group and its allies could cut by 1 million bpd if Russia contributed 150,000 bpd of that reduction. If Russia contributed around 250,000 bpd, the overall cut could exceed 1.3 million bpd.

A Russian Energy Ministry source said on Friday Moscow was ready to contribute a cut of around 200,000 bpd and that Iran, not Russia, now seemed the main hurdle for a deal.

OPEC crude production in November – Reuters Survey: tmsnrt.rs/2RqgctQ

Russia, Saudi Arabia and the United States have been vying for the position of top crude producer in recent years. The United States is not part of any output-limiting initiative due to its anti-trust legislation and fragmented oil industry.

On Thursday, U.S. government figures showed the country had become a net exporter of crude oil and refined products for the first time on record, underscoring how the surge in production has altered the supply equation in world markets.

Additional reporting by Shadia Nasralla and Alex Lawler; Writing by Dmitry Zhdannikov; Editing by Dale Hudson; Graphics by Amanda Cooper

Reuters

U.S. Stock Futures Buck Rebound in Europe and Asia

December 7, 2018
  •  Yield on 10-year Treasuries falls to 2.88%; crude retreats
  •  Italy bonds climb; emerging-market shares edge up; gold rises
Image result for Jamie Dimon, bloomberg, pictures
The Key Clues to Look for in the November Jobs Report

European stocks rebounded from the worst day in more than two years and Asian shares posted modest gains as investors sought to end a bruising week on a more upbeat note. Signs of stress remained, however, as U.S. equity futures declined and Treasuries rose.

The Stoxx Europe 600 Index, which on Thursday dropped the most since the U.K. voted to leave the EU in 2016, jumped as every sector rallied. S&P 500 futures came off their lows as the European session wore on, but remained in the red for a second day. Japanese equities outperformed as most Asian gauges nudged higher. Italian debt climbed as European bonds largely drifted. The dollar edged up and the pound fell as U.K. Prime Minister Theresa May was said to be weighing a plan to postpone the vote on her Brexit deal.

Financial markets remain on tenterhooks amid worries the trade truce between China and the U.S. won’t last after the arrest of the chief financial officer of Huawei. As traders start to doubt the Federal Reserve will raise rates in 2019, JPMorgan Chase & Co. CEO Jamie Dimon said while the focus has been on the central bank moving too quickly, there’s also a risk it does too little, too slowly.

For his part, Fed Chair Jerome Powell delivered a bullish assessment of the U.S. economy and the job market ahead of Friday’s labor report. It comes as market-implied U.S. rate expectations crumble amid the tumult in equities.

“The big question mark still is what’s going to happen in 2019” with the Fed, Omar Aguilar, CIO of equities and multi-asset strategies at Charles Schwab, told Bloomberg TV. “The jobs report could easily be the catalyst that will tell us a little more about what the path may be.”

Elsewhere, oil continued to be a drag on sentiment, with West Texas Intermediate trading below $51 a barrel as OPEC struggled to reach a deal on oil-production cuts. Cryptocurrencies continued their slide with a fresh bout of losses after U.S. regulators dashed hopes that a Bitcoin exchange-traded fund would appear before the end of this year.

Some of the key events investors will be focused on this week:

  • OPEC ministers meet again in Vienna Friday.
  • The U.S. monthly employment report for November is due.
  • China November trade data are due on Saturday.

And here are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index dipped 0.4 percent as of 9:42 a.m. London time, to the lowest in more than a week.
  • The Stoxx Europe 600 Index gained 1.4 percent, the biggest rise in more than five weeks.
  • The U.K.’s FTSE 100 Index increased 1.5 percent, the largest climb in 11 weeks.
  • Germany’s DAX Index gained 0.9 percent.
  • The MSCI Asia Pacific Index rose 0.2 percent.
  • The MSCI Emerging Market Index climbed 0.3 percent.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.1 percent.
  • The euro fell 0.1 percent to $1.1364.
  • The British pound declined 0.3 percent to $1.2747, the largest fall in a week.
  • The Japanese yen decreased 0.1 percent to 112.84 per dollar.

Bonds

  • The yield on 10-year Treasuries dipped two basis points to 2.88 percent, hitting the lowest in three months with its seventh straight decline.
  • Germany’s 10-year yield rose one basis point to 0.24 percent.
  • Britain’s 10-year yield climbed one basis point to 1.257 percent.
  • The spread of Italy’s 10-year bonds over Germany’s declined seven basis points to 2.9001 percentage points.

Commodities

  • West Texas Intermediate crude decreased 1.4 percent to $50.77 a barrel, the lowest in more than a week.
  • Gold rose 0.1 percent to $1,239.42 an ounce, the highest in more than 20 weeks.
 Updated on 

— With assistance by Adam Haigh

https://www.bloomberg.com/news/articles/2018-12-06/asia-signals-mixed-start-for-stocks-yields-drop-markets-wrap?srnd=premium

U.S. Stocks Fall Sharply on Arrest of Huawei CFO

December 6, 2018

Major indexes are also weighed down by the tech sector and a drop in oil price

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U.S. stocks fell sharply Thursday as the arrest of a top Chinese tech executive and a fresh decline in oil prices exacerbated the concerns about global growth that have rattled markets in recent weeks.

The Dow Jones Industrial Average slid 552 points, or 2.2%, to 24471, while the S&P 500 lost 1.9%, pulling both indexes back into the red for the year. The Nasdaq Composite declined 1%, cutting the technology-heavy index’s gains for 2018 to 2.6%.

All 30 stocks in the Dow industrials and all 11 sectors in the S&P 500 traded lower on the day. Caterpillar and Apple , which are sensitive to trade-related headlines, tumbled nearly 3%. And Chevron and Exxon slumped more than 2% as U.S. crude oil prices resumed their slide, falling 3.8%.

Thursday’s losses put the major indexes on course for their largest two-day point and percentage declines since Oct. 11.

“Everything feels out of control right now,” said Michael Antonelli, equity sales trader at R.W. Baird & Co. “Clients are starting to get more jittery.”

Markets started the week on a high note after President Trump reached a 90-day trade truce with his Chinese counterpart over the weekend, but that optimism turned to caution Tuesday, when the Dow industrials plunged nearly 800 points on renewed fears about the pace of economic growth.

U.S. markets were closed Wednesday for a national day of mourning for President George H.W. Bush.

The Huawei Arrest: An Unexpected Threat to Trade Talks

Meng Wanzhou — The Huawei Arrest: An Unexpected Threat to Trade Talks
As Washington-Beijing relations teeter, Chinese tech titan Huawei’s chief financial officer has been arrested in Canada and faces extradition to the U.S. But Meng Wanzhou, aka Sabrina Meng, isn’t your garden-variety executive; she’s the company founder’s daughter. Photo: EPA

Canadian authorities arrested Huawei Technologies’ chief financial officer over alleged violations of sanctions on Iran, which fanned fears of another escalation in tensions between the world’s two largest economies. Market reaction to the arrest threw into sharp relief the obstacles that lie ahead for negotiators in Washington and Beijing.

“Markets were already under pressure, and the arrest hasn’t helped,” said Neil Mellor, senior currency strategist at BNY Mellon. “We’re back to where we were beforehand, and we’re wondering if a deal’s possible given how high the stakes are.”

Tech firms have been among those worst hit by icy trade relations between the U.S. and China, weighing on global markets and prompting fears of slowing global growth. Dow components Apple and Intel fell 2.7% and 0.4%, respectively. Amazon.com and Facebook fell nearly 1%.

U.S. Treasury yields also continued slumping. The yield on the benchmark U.S. 10-year Treasury note was last 2.860%, slipping from 2.921% late Tuesday. Yields move inversely to prices.

U.S. government bonds are on the edge of a yield-curve inversion, where shorter-dated bonds yield more than longer-dated ones. An inverted curve is often interpreted as a signal of a looming recession.

Michael Arone, chief investment strategist for State Street Global Advisors, shook off recession fears, saying that even though earnings growth for S&P 500 companies is expected to slow next year, he still expects earnings-per-share growth of 9% year over year.

Trade, Tech and Tweets: Stock Markets May Get Even Bumpier in 2019
U.S. stock markets have gyrated this week with seemingly positive news on trade followed by President Trump tweeting he is still a “Tariff Man.” U.S.-China tensions, plus worries about economic growth and the tech sector, spell more volatility ahead for investors.

“The U.S. has never had a recession when U.S. corporate profits have been growing,” Mr. Arone said. “So although the backdrop is shifting somewhat from a higher growth regime to a lower growth regime, it’s too early to call the end of the bull market.”

In addition to headlines out of China, U.S. investors were awaiting a speech later Thursday from Federal Reserve Chairman Jerome Powell, which will be scrutinized for signals related to the central bank’s interest-rate policy.

While CME data gave a 76.6% probability of a rate increase at the Fed’s December meeting, figures show a less clear consensus for 2019, reflecting estimates of just over one rate raise. But some analysts see that as an overly dovish forecast.

Investors will turn their attention to Friday’s highly anticipated employment report. Economists surveyed by The Wall Street Journal expect employers added 198,000 jobs during the month and unemployment held at 3.7%.

Economists expect a further acceleration in average-hourly earnings, projecting wages advanced 3.2% for the month from a year earlier. Hourly wages rose 3.1% in October from a year ago, the best annual growth rate since 2009.

Mr. Arone said that as long as Friday’s wage figures don’t significantly accelerate, the markets will likely respond positively because it may ease inflation worries.

Meanwhile, U.S. crude fell 3.8% to $50.89 a barrel, after Saudi Arabia’s oil minister said there hadn’t yet been any agreement made over oil output cuts. Still, market participants were expecting an agreement to emerge in Vienna, where the Organization of the Petroleum Exporting Countries and its allies were scheduled to meet Thursday and Friday.

Energy shares were among the worst performers in the S&P 500, shedding 3.5%. Oil giant Chevron fell 3.5%, with sector peers following suit as a fresh wave of selling pounded oil-and-gas shares and global energy prices.

Bleak sentiment in the U.S. echoed that in Europe, where the Stoxx Europe 600 index slid 3.1%. That index, as well as benchmarks in Germany and the U.K., were all on course to close at two-year lows.

Losses were heavy in Asia, where Japan’s Nikkei 225 fell 1.9%. Hong Kong’s Hang Seng Index, as well as tech-dominated indexes like China’s Shenzhen A-Share and the Taiwanese Taiex, were all more than 2% lower.

Write to Jessica Menton at Jessica.Menton@wsj.com and David Hodari at David.Hodari@dowjones.com

https://www.wsj.com/articles/s-p-futures-tech-stocks-tumble-after-huawei-cfo-arrest-1544075565

Saudi energy minister says reduction of 1 mln barrels per day would be enough for OPEC Plus

December 6, 2018

Saudi Arabia’s Energy Minister Khalid Al-Falih said on Thursday reducing production by one million barrels per day would be enough for OPEC Plus.

The Saudi minister said that it was important that all non-OPEC producers participate in any agreement to reduce production and that all options were on the table to reach an agreement.

“We’re looking for a sufficient cut to balance the market, equally distributed between countries,” Al-Falih told reporters ahead of an OPEC meeting in the Austrian capital.

His Iraqi counterpart, Thamir Ghadhban, said: “I am optimistic that the agreement will stabilize the market, will stop the slide in the price (of oil).”

OPEC members are meeting to agree on their response to recent declines in oil prices.

The Saudi minister said that it was important that all non-OPEC producers participate in any agreement to reduce production. (File/AFP)

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Crude prices began falling in October and continued to plunge last month because of oversupply and fears weaker global economic growth would dampen energy demand. The price of both benchmark US crude and the standard for internationally traded oil fell 22 percent in November.

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Mohammed Hamad Al-Rumhy, Oman’s oil and gas minister, said Wednesday of the production cut expected at Thursday’s meeting that “we haven’t discussed the numbers.”On Wednesday, Trump took to Twitter to urge producers to keep pumping.

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“Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!” said Trump, who has repeatedly accused the cartel of keeping prices artificially high.
The Saudi minister pointedly said Washington should back off.

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“We don’t need permission from anyone to cut,” he said.

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The US “is not in a position to tell us what to do,” he added.

Arab News

http://www.arabnews.com/node/1416566/business-economy

Saudi Arabia: US ‘not in a position to tell OPEC what to do’

December 6, 2018

President Donald Trump’s call for OPEC to keep oil flows unrestricted drew criticism from Saudi Arabia. The oil cartel convened in Vienna to discuss cutting output, in a bid to bring prices back from a two month slump.

    
OPEC meeting in session in Vienna, Austria

Saudi Arabian Oil Minister Khalid Al-Falih said ahead of a meeting of the Organization of Petroleum Exporting Countries (OPEC) on Thursday that the cartel did not “need permission from anyone to cut” production.

The comments came a day after US President Donald Trump said he wanted OPEC to keep production high to ensure low oil prices.

The US, Al-Falih said, “is not in a position to tell us what to do.”

OPEC members are meeting in Vienna to discuss ways to raise international oil prices. Crude prices have slid since October amid high rates of production in countries such as the US and Saudi Arabia.

Since October, the price of both benchmark US crude and the standard for internationally traded oil has fallen some 22 percent.

Donald J. Trump

@realDonaldTrump

Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!

28.4K people are talking about this

Read more: Riyadh between an OPEC rock and Trump’s hard place

Looping Russia in

To raise prices, OPEC members, who account for more than half of the world’s oil output, will spend the next two days evaluating whether to renew their cooperation with Russia and other non-cartel producers, or simply slash production further.

Russia and OPEC agreed in 2016 to a coordinated effort to scale back output in an attempt to reduce a surplus in the market, created in large part by the increase in supply from US fracking. The long rally in oil prices lasted until October. Moscow is expected to deliver its decision on further cuts by Friday.

“A million (barrels cut) would be ideal,” Al-Falih said. “Ideally, everyone should join equally. I think that’s the fair and equitable solution,” he added.

Read more: Qatar exit exposes OPEC’s decreasing relevance

According to the International Energy Agency, OPEC daily output stood at 32.99 million barrels in October.

OPEC members will also have to contend with Iran. In particular, Thursday’s talks will deal with whether or not to exempt Iran from having to cut production

Iran has asked for the exemption. Oil Minister Bijan Namdar Zanganeh said that his country “doesn’t join any agreement for cutting production because of the special situation Iran faces,” a reference to US sanctions against the country’s oil industry.

jcg/amp (AFP, Reuters)

https://www.dw.com/en/saudi-arabia-us-not-in-a-position-to-tell-opec-what-to-do/a-46612531

OPEC eyes output cuts as Trump calls for boost

December 6, 2018

OPEC members and other oil-producing countries mulled cuts in output Thursday to prop up plunging prices, defying repeated calls by US President Donald Trump that they keep the taps open.

“We’re looking for a sufficient cut to balance the market, equally distributed between countries,” Saudi oil minister Khalid al-Falih told reporters ahead of an OPEC meeting in the Austrian capital.

AFP / JOE KLAMAR
If the OPEC members and other nations meeting in Vienna continue to pump at current record levels, they risk seeing prices continue to tumble 

Oil ministers from 20 or so countries are in Vienna for two days of meetings — first, the 15 members of OPEC, then a wider group including countries outside the cartel — to discuss how to counter the tumble in prices over the past two months.

The price of a barrel of Brent, the European benchmark, fell four percent to below $60 Thursday, hit by the Saudi comments which were taken on the markets to be very cautious and concerns over an economic slowdown.

On Wednesday, Trump took to Twitter to urge producers to keep pumping.

“Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!” said Trump, who has repeatedly accused the cartel of keeping prices artificially high.

Saudi minister al-Kalih pointedly said Washington should back off.

“We don’t need permission from anyone to cut,” he said.

The US “is not in a position to tell us what to do,” he added.

At the end of 2016, OPEC’s regular members joined forces with other countries — most notably Russia — to scale back output in a bid to reduce a glut that was weighing on prices.

AFP/File / Brendan Smialowski
Trump took to Twitter to urge producers to keep pumping

The coordinated move — which has since been extended — stimulated a long rally in oil prices right up until October 2018.

Over the past two months, however, prices have plunged again.

– Cuts on the cards? –

AFP / JOE KLAMAR
Kuwait’s Minister of Oil and Electricity Bakheet Al-Rashidi arrives OPEC headquarters

In order to try and counter this, the so-called OPEC+ — who together account for more than half of the world’s oil output — is discussing renewing the pact or perhaps cutting output still further.

All the signals are that more reductions in output are on the cards, despite the pressure from Trump, who argues that higher energy costs will choke off the economy.

“A million (barrels cut) would be ideal,” the Saudi minister said. “Ideally, everyone should join equally. I think that’s the fair and equitable solution.”

OPEC daily output stood at 32.99 million barrels in October, according to the International Energy Agency.

However, OPEC’s third-biggest producer Iran wants to be exempted from any such measures.

Given the economic sanctions being reimposed by the United States, the Islamic republic ” doesn’t join any agreement for cutting production because of the special situation Iran faces,” oil minister Bijan Namdar Zanganeh said.

Zangeneh said the estimated surplus currently on the market amounted to 1.3-2.4 million barrels per day.

Ideally, “the price would be better to stand at $60-70. That is acceptable for most OPEC countries.”

Trump’s intervention complicates matters.

AFP/File / HAIDAR MOHAMMED ALI
All signals suggest more reductions in output are on the cards

OPEC kingpin Saudi Arabia, in particular, finds itself in an especially delicate position in the wake of the murder of opposition journalist Jamal Khashoggi.

Trump has continued to support the kingdom despite worldwide outrage over the murder but he is at the same time keeping up the pressure for lower prices.

“The big unknown is how President Trump will react to any production cuts,” said analysts at ING.

Iran’s Zangeneh said it was the first time a US president was trying to tell OPEC what to do.

“They should know that OPEC is not part of their Secretary of Energy.”

Most OPEC members felt the same way, but “some members are going along with US policy,” he said.

AFP/File / Rodger BOSCH
Prices have plunged more than 30 percent over the past two months

Negotiations between OPEC members are fraught, however, as some feel that Saudi Arabia wields too much clout in setting policy.

Iran has accused Saudi Arabia of being in thrall to the US.

In a surprise move on Monday, Qatar — which has been an OPEC member since 1961 — said it would quit the cartel next month in order to focus on gas production.

Doha accounts for only around two percent of OPEC output but the move caught the headlines given the political overtones.

AFP / AFP
OPEC crude reserves in 2017

Qatar minister Saad Sherida Al-Kaabi said he had met a number of other OPEC ministers, but not his Saudi Arabian colleague.

“I don’t think they want to meet me. They are blockading our country,” he told journalists.

Qatar has been isolated by a group of countries led by Saudi Arabia since June 2017, in the worst political fallout between the energy-rich Gulf powers.

AFP

OPEC members expected to agree cut in crude production

December 6, 2018

OPEC members are meeting to agree on their response to recent declines in oil prices, with analysts predicting a cut in production of at least 1 million barrels per day.

The OPEC members convene in Vienna to discuss the expected production cut. (File/AFP)

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Crude prices began falling in October and continued to plunge last month because of oversupply and fears weaker global economic growth would dampen energy demand. The price of both benchmark US crude and the standard for internationally traded oil fell 22 percent in November.

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Mohammed Hamad Al-Rumhy, Oman’s oil and gas minister, said Wednesday of the production cut expected at Thursday’s meeting that “we haven’t discussed the numbers.”

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US President Donald Trump tweeted Wednesday that “Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!“

Associated Press