Global oil output hit new record pending promised OPEC cuts

Author

12 November, 2016

If OPEC is able to pass successful production cuts throughout member and non-member nations however, then the IEA suggests the market will see a quick shift from surplus to deficit.

The Organization of the Petroleum Exporting Countries meets at the end of November to discuss a proposed cut in production to a range of 32.5 to 33 million bpd.

In the report, OPEC trimmed its forecast of non-OPEC supply this year, although supply growth in 2017 is put at 230,000 bpd, little changed from last month.

The West Texas Intermediate (WTI) benchmark for USA crude futures declined $1.25, or 2.8%, to $43.41 a barrel, its lowest settlement since mid-September on the New York Mercantile Exchange.

Brent crude, the Global standard, traded at $46.48 a barrel Thursday.

The market was dampened by a 2.4-million barrel rise in USA crude inventories to 485 million barrels last week, reported by the Energy Information Administration on Wednesday.

In an attempt to boost prices, OPEC agreed in September to cut output, although investor doubts have grown that it will be able to implement the deal at its next meeting on November 30.

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"OPEC raising its forecasts, ordinarily a positive, but we're all obviously election-focussed ... so I don't think that's driving (oil) as much as it normally would", Lawler said.

The initial market shock, which began on Wednesday when it was apparent Trump had won the general election, prompted Ian Bremmer, president of risk consultancy Eurasia Group, to say that the "world is heading into a profound geopolitical recession".

The agency said all of the cartel's members except Saudi Arabia are now pumping close to their total production capacity. Mr. Trump has pledged to loosen restrictions on USA oil production, which could boost output further, send prices lower and complicate OPEC's role in the oil market. International January Brent crude oil closed at $45.61, down $0.93 or -2.00%. The market will be looking to see if OPEC can recognize this fact and is willing to take concrete action to reduce its own supplies and prop up global oil prices.

The probability of OPEC implementing output cuts is low because the group has fragmented as members seek exemptions, according to Abhishek Deshpande, chief energy analyst at Natixis SA. The estimate for non-OPEC supply for 2017 dipped by 10,000 barrels a day to an average of 56.43 million barrels a day.

The post Nigeria records increased oil output ahead OPEC production cut talks appeared first on Punch Newspapers.

"Trump means more US domestic energy production", Adam Ritchie, founder of consultancy AR Oil Consulting told Bloomberg.

"Any slowdown would lead to lower oil demand growth and defer a recovery in oil markets", said Paul McConnell, analyst at Wood Mackenzie.


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